Barrick Mining Corporation (B 2.40%) stock tumbled 8.7% through 1:15 p.m. ET Tuesday. As you may have heard, there's war in the Mideast, and ordinarily, investors flee to gold and silver as safe havens in times like these. Indeed, at first that's what seemed to be happening.
Problem is, gold and silver prices are tanking today, and they're taking the stock price of this gold miner down with them. (Barrick also mines silver.)
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Gold and silver prices fall
Gold prices closed out February near $5,278 per ounce, according to data from TradingEconomics.com. Prices spiked after U.S. and Israeli forces began striking Iran over the weekend, rising as high as $5,416 early Monday before starting to fall.
At last report, gold was trading at $5,102 per ounce, down 3.9% from yesterday's close.
The story on silver is similar. Silver closed at $93.73 per ounce at the end of February before moving higher, topping $96.10 Monday. Today, silver is down 6.1% to $82.46 per ounce.
NYSE: B
Key Data Points
Is Barrick stock a sell?
Why is this happening? For one thing, the U.S. dollar -- also a safe haven -- is strengthening. Thus, it takes fewer dollars to buy an ounce of gold or silver. The natural result is falling prices for precious metals.
War can also be inflationary -- which should be good for precious metal prices. But if inflation convinces the Fed to hold interest rates steady, this could lower inflation long term -- or so the thinking goes.
Personally, I expect gold and silver prices to react to war worries the way they usually do. I think the general price trend will be up, not down. With Barrick stock trading just over 17 times earnings and expected to grow earnings nearly 16% next year, the stock looks close to being cheap enough to buy.
