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Investment idea Barrick Gold: to earn from rise of gold

Declining trend on gold, which began in 2011, was interrupted last year and ETF of this metal gained more than 8% in the last 12 months. On this background Barrick Gold stock gained over 100%. Increase in demand for risky assets at the end of last year, after Trump election, became the reason for correction of «gold» assets. However, approximately since the beginning of 2017, demand for them renewed. Investors include hedging assets in their portfolio to secure against possible collapse of market, which soaring since November. In addition, the demand is maintained by expectation of inflation growth acceleration. Technical correction in Barrick Gold within the last three weeks gives opportunity to buy shares at good prices.
Barrick Gold is the world’s largest gold mining company; its shares are good investments into the industry. In the last several years, it made tremendous success by selling of non-core assets to decrease debt level. In 2016 Barrick Gold reduced debt by $2 billion. The company plans further reduction of it by $1,5 billion in 2017. Barrick Gold has an attractive measure of total production cost per ounce of gold (AISC), it is in range from $650 up to $710. At the current levels of prices for precious metal, this measure makes the company rather sustainable. Major central banks still adopt accommodative monetary policy. Therefore, there is enough liquidity in a global financial system for further increase in price of gold.


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