Gold, Stocks, and a Bit of Common Sense

Now, there was a dust-up on Wall Street, come the thirtieth of January in the year of our Lord two thousand and twenty-six. Some folks called it a “Black Friday,” which struck me as a mite dramatic – like naming a drizzle a hurricane. But the news of Mr. Trump’s pick for the Federal Reserve, a Mr. Warch, sent a shiver through the gold-bug community, and they commenced to hightail it out of their positions faster than a scalded cat. A body might think the world was endin’, judging by the fuss.

The gold stocks, bless their fickle hearts, took a tumble even steeper than the gold itself. Shares of Newmont (NEM +4.00%) and Barrick Mining (B +2.41%) both lost a considerable portion of their value – a double-digit percentage, they said. Which led a man to wonder if maybe, just maybe, there was a bargain to be had. A chance to scoop up some shiny metal at a price a reasonable fella could afford.

A New Sort of Prosperity for Gold Miners

Now, I’ve seen a good many booms and busts in my time, and I’ve learned this much: panicking rarely leads to profit. These two companies, Newmont and Barrick, they’re not exactly paupers, you see. The recent dip in gold prices ain’t likely to ruin ’em. They’re already makin’ a pretty penny, and a few dollars less won’t send them to the poorhouse.

Newmont’s costs to get an ounce of gold out of the ground, all in, were around $1,566 last quarter. They reckon it’ll be a bit higher next quarter, around $1,760. Barrick’s doin’ even better, around $1,538 an ounce. And with gold fetchin’ around $4,622 an ounce, they’re makin’ a profit margin that’d make a Mississippi steamboat captain blush. Why, back in my day, such margins were unheard of! A fella could barely turn a nickel.

And they’re not sittin’ still, these companies. They’re expandin’. Newmont just started producin’ gold at their Ahafo North mines in Ghana. They expect to pull out between 275,000 and 325,000 ounces a year for the next thirteen years. Barrick’s got a site called Fourmile, and they’re claimin’ it’s the biggest gold find of the century. They reckon it could produce up to 750,000 ounces a year. That’s a heap of gold, let me tell ya.

What’s Drivin’ These Companies?

Now, Mr. Warch takin’ the reins at the Federal Reserve might keep things stable, which ain’t a bad thing. But it ain’t likely to change the two main things that are helpin’ Newmont and Barrick.

First off, folks all over the world still want gold. Especially central banks that don’t entirely trust the U.S. dollar. They’re buyin’ up gold like it’s goin’ out of style, and that keeps the price healthy. And Mr. Warch, bless his heart, ain’t likely to change that.

But there’s somethin’ else at play, and it’s a bit more modern. Seems all this artificial intelligence requires a lot of copper. Copper’s ideal for data centers, you see, ’cause it conducts electricity and don’t corrode. They reckon these data centers could need between 330,000 and 420,000 tonnes of copper a year by 2030. That’s a mountain of copper!

Newmont produced 35,000 tonnes of copper last quarter. Barrick did even better, 55,000 tonnes, thanks to a big increase at their Lumwana mines in Zambia. Are these companies practically artificial intelligence stocks in disguise? Well, I wouldn’t go that far. But they’re sure to benefit from this demand for copper. It’s a curious thing, ain’t it? Gold and copper, drivin’ the future.

A Bounce Back, Perhaps?

Some savvy investors already think this recent sell-off was overdone. The stocks are startin’ to bounce back. Others are callin’ it a “dead cat bounce,” which is a colorful way of sayin’ it won’t last. I reckon I’m with the former camp.

Gold prices might stay a bit jumpy, that’s true. But the reasons for demand ain’t likely to disappear overnight. And this AI boom ain’t about to collapse, either. Newmont and Barrick should continue to make exceptional profits in this environment.

Now, some folks might not call these stocks “value stocks,” but they ain’t priced to the sky, either. Newmont’s tradin’ at about 15.7 times forward earnings. Barrick’s even cheaper, around 12.5 times forward earnings.

Plunges like this one can be unnervin’, no doubt. But they also create opportunities for investors who take the time to understand what’s goin’ on. A fella with a bit of common sense can often find a bargain if he’s patient and doesn’t panic at the first sign of trouble.

2026-02-04 10:52

A New Sort of Prosperity for Gold Miners

What’s Drivin’ These Companies?

A Bounce Back, Perhaps?

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