Gold Sets Another Record High, Silver Punts (NEM, ABX, GG, GLD, IAU, GDX, GDXJ, SLV, DBS, SLW, PAAS, SIL)

As the disagreement on the US debt ceiling turns into a debacle, gold posted a new high near $1,635/ounce this morning before pulling back to trade at around $1,624 late in the afternoon. Silver has not followed suit, trading around $40/ounce all day. Gold remains the undisputed choice of safe haven.

Newmont Mining Corp. (NYSE: NEM) reported earnings this morning that failed to reach expectations, posting adjusted EPS of $0.90, roughly -10% below estimates. Revenue also missed expectations, coming in at $2.4 billion compared with estimates of $2.5 billion. Production of gold fell -5.4% and copper production fell -45%, primarily on lower-grade ores. Newmont’s average price for gold was $1,501/ounce, in line with realized prices reported yesterday by Barrick Gold Corp. (NYSE: ABX) and Goldcorp Inc. (NYSE: GG). [https://247wallst.com/2011/07/28/gold-mining-earnings-shine-but-less-than-gold-itself-abx-gg-gld-gdx-gdxj/]

Newmont’s other issue was rising costs, which rose to $538/ounce, between cash costs of $445 at Barrick and $553 at Goldcorp. Managing costs remains the main anchor on gold miners’ share prices compared with the price of gold.

Newmont’s CEO told CNBC that he expects gold prices to reach $1,750/ounce in 2012 as a result of inflationary pressures and ongoing economic problems in the US and Europe. He also noted that Newmont would raise its dividend in the third quarter from $0.20/share to $0.30.

Not even the dividend hike could keep Newmont’s stock from falling. Shares are down more than -3.5%, at $55.70, in the late afternoon, within a 52-week range of $50.05-$65.50.

The SPDR Gold Trust (NYSE: GLD) posted a new 52-week high today of $159.25, but has retreated somewhat. The new 52-week range is $113.34-$159.25. The iShares Gold Trust (NYSE: IAU) also posted a new 52-week high today, for a new range of $11.35-$15.95.

The Market Vectors Gold Miners ETF (NYSE: GDX) has lost another -2% today, trading late in the day at $56.90, in a 52-week range of $47.45-$64.62. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) lost more than -2% early this morning, but has gained about half of that back to trade now at $36.00, within a 52-week range of $25.89-$44.86.

Silver’s lackluster performance on the commodity markets today is reflected in the ETFs that focus on the devil’s metal. The iShares Silver Trust (NYSE: SLV) is up about 0.6%, at $38.99, within a 52-week range of $17.38-$48.35. The PowerShares DB Silver Fund (NYSE: DBS) is up about 0.75% at $70.28, within a 52-week range of $31.09-$86.98.

Silver miner Silver Wheaton Corp. (NYSE: SLW) is down about -2%, at $36.23, within a 52-week range of $18.15-$47.60, and Pan American Silver Corp. (NASDAQ: PAAS) is down about -2.5%, at $30.32, within a 52-week range of $22.52-$43.06. The Global X Silver Miners ETF (NYSE: SIL) is down about -0.6%, at $26.25, within a 52-week range of $12.90-$31.34.

Paul Ausick