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Sticky US Inflation Proved to be a
Headwind for Gold Barrick Gold Expects
Better Gold Production this Year

Sticky inflation swipes some of gold’s recent gains. There was nothing in the January US CPI report to back up an early cut from the Federal Reserve. The hotter than expected CPI immediately pressured the precious metals complex, particularly gold, which dropped below $2,000/oz for the first time this year.

There has been a structural shift in the consensus outlook for US interest rates in the last few weeks, backed by hotter economic data, and resulting in a stronger dollar and thus a weaker gold price.

The expected date of first cuts has been pushed out, and now rests with the June Federal Reserve meeting, thus potentially delaying the onset of any upside for gold.

The sharp decline in gold stopped at the low from 12 December. The short-term outlook for gold is likely to remain very dependent on data and the US dollar. The dollar could see support in the short term from the higher likelihood of interest rate cuts in the UK, EU and other economies coming before the US, thereby contributing to the dollar’s relative attractiveness versus those currencies. The markets currently expect 40 bp more cuts in the Eurozone than from the Fed by the end of the year.

Barrick Gold expects better gold production this year after 23-year low. In 2023, the second-largest gold producer experienced a 2% decline in total gold production to 4.05 moz versus 4.14 moz in 2022.

This year, the company will restart operations at the Porgera mine in Papua New Guinea, which should add 50-70 koz to output, and is expecting attributable production to be up to 6.2% higher at 4.3 moz.

The support-turned-resistance level of ~$2,000/oz may keep the gold price in check for the next few weeks.

Barrick Gold Corporation recently announced the declaration of a dividend of $0.10 per share for the fourth quarter of 2023. The dividend is consistent with the Company’s Performance Dividend Policy announced at the start of 2022.

The Q4 2023 dividend will be paid on March 15, 2024 to shareholders of record at the close of business on February 29, 2024.

Barrick plans to undertake a new share repurchase program for the buyback of its common shares.

Barrick’s Board of Directors has authorized a new program for the repurchase of up to $1.0 billion of the Company’s outstanding common shares over the next 12 months at prevailing market prices in accordance with applicable law.

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