The actions of Barrick Gold Corporation (NYSE: GOLD) have lost 20% of their value since mid-April, with the price of gold falling from $2,000 an ounce in March to $1,800 currently. While other commodities, including copper and iron, also reported lower on fears of lower demand due to China’s zero-tolerance policy on the pandemic, a U.S. dollar strong deterred gold futures. The Russian-Ukrainian war is causing major changes in the geopolitical strategies of many countries, leading to new trade relations and energy security pacts. Thus, Trefis believes that the growing uncertainties surrounding this change are likely to propel gold prices until global macroeconomic stability is achieved. Trefis highlights historic trends Barrick Gold earnings across key operating segments in an interactive dashboard analysis.

Will the demand for precious metals grow in 2022 and 2023?

In 2021, Barrick Gold reported 4.4 million ounces of gold sold at an average price of $1,790/ounce. The uncertainty surrounding the macroeconomic recovery, coupled with high benchmark oil prices, has led to a surge in commodity prices, which has helped the company’s revenue and results in recent quarters. After seeing a high of $2,200/oz in 2020, the precious metal has seen a correction in recent months as the US Dollar strengthened. As such, the company reported a 5% (year-over-year) revenue contraction and a 20% (year-over-year) decline in operating cash flow in 2021. Per annual filing, sales gold, copper and other metals account for 90%, 8% and 2% of total revenues, respectively. According to the World Bank Commodity Market Outlook, gold prices are expected to decline from $1,880/oz in 2022 to $1,650/oz in 2023. Similarly, copper prices are expected to decline by 4, $60/lb in 2021 to $4.40/lb in 2023.

The stock underperformed broader markets

GOLD stock fell from levels of around $21 in February 2020 (pre-crisis peak) to levels of around $16 in March 2020 (when markets bottomed), implying that the GOLD stock is down just 24% from its rough pre-crisis peak. It has seen a strong rally after the market selloff and has touched the pre-crisis level of $20 again now. By comparison, the S&P 500 index has gained 23% in value from pre-pandemic levels.

With stock prices falling precipitously across all sectors, we may be heading into a bear market for the first time since March 2020, when the Covid-19 outbreak triggered a stock market crash. We capture key Dow Jones trends during and after major stock market crashes in our interactive dashboard analysis,’Comparison of stock market crashes.’

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