Barrick Gold At A Crossroads: Strong Q4 Earnings Clash With Death Cross Signal

Investors in Barrick Gold Corp GOLD, the gold and copper miner, are closely monitoring a development occurring on the stock’s price chart, a technical indicator known as the Death Cross.

This bearish signal, a crossover of the 50-day moving average (yellow line above) moving below the 200-day moving average (blue line above), has traditionally been associated with potential downward trends in stock prices.

Over the past year, Barrick Gold’s stock has seen fluctuations that have closely aligned with the movements in spot gold prices. While spot gold has recovered from its October lows and is now trading with a more bullish momentum, the occurrence of a death cross on Barrick’s chart presents further uncertainty for shareholders.

Barrick Gold Stock Made A Death Cross

A death cross is interpreted as a sign of weakening momentum. It's often viewed by technical analysts as a signal that a stock's upward trend may be reversing. In the case of Barrick Gold, this development could be indicative of weakening bullish momentum and heightened selling pressure.

Barrick Gold stock has been trending downward for the most part of 2023. The stock has underperformed gold spot price performance and the U.S. broad equity market as tracked by the S&P 500 Index. While Barrick Gold stock is down 21% over the past year, gold spot price has gained 7.5% and the S&P 500 is up over 20%.

2024 hasn't been great so far either – with the stock down over 22% YTD.

On Feb. 14, the company reported its fourth-quarter earnings.

Q4 Earnings Shone Bright

In Q4, Barrick Gold exceeded expectations with revenue at $3.06 billion. Gold production and sales increased by 1%, reaching 1.05 million and 1.042 million ounces, respectively. The average realized gold price rose 3% to $1,986 per ounce.

Copper production rose 1% to 113 million pounds, with an average realized copper price of $3.78 per pound. Adjusted EPS exceeded expectations at 27 cents.

Related: Barrick Gold’s Q4: Earnings Shine, Buyback Glitters & More

The results showcase robust performance in both gold and copper segments, contributing to a strong Q4 financial outcome.

Analysts See Over 90% Upside

BMO Capital reviewed the stock in January and has a one-year price target of $27 on Barrack Gold stock. This represents an upside of 90.27%. The consensus analyst rating for Barrick Gold stock currently stands at Outperform with a consensus price target of $20.60 a share.

However, Technical Indicators Are Bearish

The death cross in Barrick Gold's stock chart reflects the ongoing shift in market sentiment, with some investors becoming more cautious about the company's future prospects.

Since technical indicators are not foolproof, they must be considered alongside other fundamental factors.

It remains to be seen whether the death cross will materialize into a sustained downward trend, or if the company can deliver on analyst expectations.

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Image created with artificial intelligence using MidJourney.