Barrick Gold Corporation (USA) (ABX), Goldcorp Inc. (USA) (GG): Are Warren Buffett and Natural Gas Killing the Golden Age?

The behavior of the golden age
Since gold peaked late in 2011, the divergence between the commodity, as represented by the SPDR Gold Trust (ETF) (NYSEARCA:GLD), and gold miners such as Barrick Gold Corporation (USA) (NYSE:ABX) and Goldcorp Inc. (USA) (NYSE:GG) has been significant. Much of the difference can be explained by recessionary pressures that more negatively affect operating companies than the metal itself. As the economy stabilizes — if that is, in fact, what’s happening — gold miners may begin to close the gap. Barrick Gold Corporation (USA) (NYSE:ABX) reported a net loss for both the fourth quarter and for the full year, based largely on increased production costs and other impairments; Goldcorp Inc. (USA) (NYSE:GG) faced similar pressures.

Looking ahead
While this is a fairly topical review of some of the complex forces at work within the economy, it illustrates how recent developments have led to significant structural shifts in the commodities markets and the financial markets in general. You shouldn’t underestimate the importance of other factors such as sequestration and the political landscape, but at very least, it’s important to look far below the surface to understand how these forces can interact. Many global macroeconomic forces still favor higher gold prices, but developments in the energy market should figure centrally in your thinking moving ahead.

The article Are Warren Buffett and Natural Gas Killing the Golden Age? originally appeared on Fool.com.

Fool contributor Doug Ehrman and The Motley Fool have no position in any of the stocks mentioned.

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