Submitted by Fox First at Ten on September 14th
NEW YORK (AP) - Shares of gold mining companies rose a second day on higher gold prices after the Federal Reserve launched an open-ended, aggressive program designed to improve economic growth.
The companies benefit because they can sell gold at higher prices. But those gains will be offset, at least partially, by higher costs for labor, fuel, exploration and production, Argus Research analyst Bill Selesky said Friday.
"Their capital expenditures are so high that they don't get the big bang for their buck in earnings that they should," he said.
The Fed unveiled a series of actions Thursday to help the economy. It will spend $40 billion a month to buy mortgage bonds to make home buying more affordable. It plans to keep short-term interest rates at record lows through mid-2015 and it is prepared to take additional steps if job growth remains weak.
The news prompted investors to buy more gold to protect the value of their portfolio against future inflation. Gold prices increased $4.30 to $1,776.40 per ounce in early trading Friday after ending Thursday up 2.2 percent.
In late-morning trading, shares of Barrick Gold Corp. rose 90 cents, or 2.2 percent, to $42.53; Newmont Mining Corp. increased $1.88, or 3.4 percent, to $57.33; Goldcorp Inc. gained $1.12, or 2.5 percent, to $46.53 and Kinross Gold Corp. was up 61 cents, or 6.2 percent, to $10.51.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
