Tag: Motley Fool Australia

The Northern Star Resources Ltd (ASX: NST) share price could be on the move today after the release of its quarterly production update.

How did Northern Star perform in the fourth quarter?

Newcrest Mining Limited (ASX: NCM) isn’t the only gold miner to finish FY 2020 strongly. This morning Northern Star revealed that it had a strong end to the financial year.

According to the release, Northern Star delivered a record 262,717 ounces of gold sold during the June quarter. This was achieved with an all-in sustaining cost (AISC) of A$1,475 an ounce (US$969 an ounce). This includes 50,251 ounces of gold sold at its Pogo operation for an AISC of US$1,276 an ounce.

For the full year, Northern Star achieved record total sales of 900,388 ounces at an AISC of A$1,496 an ounce (US$983 an ounce).

From this, its Australian operations sold a record 727,352 ounces at an AISC of A$1,350 an ounce (US$887 an ounce). This was at the low end of its stated 720,000 ounces to 800,000 ounces guidance range. The balance was made up by the Pogo operation, which mined 200,718 ounces and sold 173,036 ounces at an AISC of US$1,402 an ounce.

High gold price boosts balance sheet.

Northern Star reported an average realised price of A$2,208 an ounce for FY 2020.

This includes sales of 271,378 ounces into hedged positions, reducing the hedge book to 536,426 ounces and equal to just 15% of the next three years’ production.

This led to the company’s underlying free cash flow coming in at A$218 million during June quarter, despite investing ~A$44 million into growth capital and exploration.

As a result, Northern Star’s cash, bullion, and investments rose by a sizeable 40% to A$770 million at 30 June 2020. Its corporate bank debt stood at A$700 million, with A$200 million repaid post quarter on 6 July.

Northern Star’s Executive Chair, Bill Beament, commented: “Our quarterly sales of 262,717oz was not only a record, but also very solid given the imposts stemming from the COVID-19 measures we moved quickly to put in place.”

Mr Beament believes this demonstrates just how much its free cash flow can grow when conditions return to normal.

“All together, this demonstrates the significant potential to grow our free cashflow as the impacts of COVID-19 on production and costs are alleviated and, importantly, as our exposure to the spot gold price increases,” he added.

FY 2021 group production and cost guidance will be published with its annual reserve and resource update in the coming weeks.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 3 investing strategies to profit from a second ASX share market crash in 2020
• 5 things to watch on the ASX 200 on Tuesday
• Coles and 2 more ASX 200 shares to watch this week
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Northern Star share price on watch after smashing Q4 records appeared first on Motley Fool Australia.

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ASX bank shares could be undervalued right now. That’s the message coming from leading fundie, Neil Margolis, from Merlon Capital.

Why is this fund manager bullish on the banks?

According to an article in yesterday’s Australian Financial Review (AFR), Mr Margolis sees strong upside potential in Aussie bank shares.

Much of the investment thesis is based around the impact of bad debts and forecast dividends in the short to medium term.

According to the article, Mr Margolis said, ‘if consensus estimates for bad debts of between $8 billion to $10 billion per bank over the next three years were correct, it would allow banks to make modest dividend payments’.

Introducing dividend estimates into the equation is a real game-changer. The Australian Prudential Regulation Authority (APRA) has been cracking down on bank dividends in 2020.

However, the banking regulator is now looking to revise its guidance on those dividend restrictions. That could be good news for ASX bank shares and their investors this year.

What does this mean for ASX bank shares?

I think much of the current pricing of ASX bank shares reflects a pessimistic view on dividends. 

However, the Commonwealth Bank of Australia (ASX: CBA) share price currently has a 5.8% dividend yield. Similarly, Westpac Banking Corp (ASX: WBC) shares are yielding a huge 9.7% today.

While I wouldn’t expect these yields to be maintained in the current climate, low bad debts and a modest dividend could definitely be good news.

That could mean ASX bank shares have been oversold at their current prices. The Commbank share price has fallen 7.2% in 2020 but is now outperforming the S&P/ASX 200 Index (ASX: XJO).

Westpac shares have fared worse, falling 25.5% to $18.01 per share. Interestingly, both bank shares are trading at a price-to-earnings (P/E) ratio of 13.5.

It’s worth noting that Mr Margolis wasn’t totally bullish on ASX bank shares, highlighting that a prolonged period of coronavirus restrictions could spell trouble for current valuations.

Prolonged restrictions could make current bad debt provisions insufficient and ‘that could mean capital raisings and zero dividends’.

Are there other ASX dividend shares to buy?

According to the AFR article, casino operator Star Entertainment Group Ltd (ASX: SGR) could be worth a look at $2.77 per share.

Star has similar upside exposure to economic recovery as the banks but with ‘more than $2 of property value’ per share to help protect investors against the downside.

Mr Margolis was less bullish on Telstra Corporation Ltd (ASX: TLS) shares. Significant headwinds including challenges presented by the NBN were cited as potential negatives for the Telstra dividend.

Foolish takeaway

It’s a very interesting time in the markets ahead of the August earnings season.

I often take market commentary with a grain of salt. However, it does give us investors some food for thought ahead of a big month for ASX shares.

More reading

• 2 of the best ASX dividend shares to buy now
• ASX 200 drops 1.1%: Big four banks fall, Resolute rockets, Afterpay tumbles
• Are you ready to invest in ASX shares?
• Are ASX 200 shares overvalued right now?
• 3 of the best ASX blue chip shares you can buy right now

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why this leading fundie thinks ASX bank shares are undervalued appeared first on Motley Fool Australia.

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The A2 Milk Company Ltd (ASX: A2M) share price continues to kick goals for investors.

Shares in the Kiwi dairy group fell 2.1% lower yesterday but remain up 39.1% for the year. A $10,000 investment in A2 Milk in early April 2015 would be worth a tidy $348,214 today.

However, I prefer to look to the future instead of the past with my investments. That means I’ve got my eye on the A2 Milk share price ahead of its full-year earnings result on 19 August.

Is the A2 Milk share price overvalued?

The A2 Milk share price is trading just 2.7% below its all-time high of $20.05. 

That could mean it has been overbought by investors seeking to get extra cash into the market. However, I think there are enough strong, underlying share price drivers to warrant further exploration.

What was in the half-year result?

There’s also not too much that can be drawn from the company’s February half-year results given the changing global landscape.

A2 Milk posted half-year revenue up 31.6% to $806.7 million with EBITDA climbing 20.5% to $263.2 million.

That result was underpinned by strong growth in China label infant nutrition and United States milk revenue. Given China’s strong bounce back from the coronavirus pandemic, we could see further sales growth in these segments in August.

The company’s April trading update also gave investors some confidence about the full-year numbers. A2 Milk reported strong sales revenue growth across all key regions despite uncertainty for both revenue and earnings forecasts.

A2 Milk’s full-year EBITDA margin is expected to land between 31-32% for FY20. Currency impacts will also be worth watching given the volatility in the Australian, New Zealand and US dollars in 2020.

What is there to like about the A2 Milk share price?

One thing I like about the A2 Milk share price is its aggressive expansion plans. A2 Milk is looking to take the brand further abroad into the Canadian market.

Given its strong track record of strategy execution, I’m quietly hopeful about its Canadian plans.

A2 Milk has also continued to expand through increased investment in Synlait Milk Ltd (ASX: SM1).

A2 Milk now owns 19.84% of its fellow Kiwi dairy producer. While I wouldn’t call that diversification as such, I think it could generate a new growth corridor for A2 Milk going forward.

I also think recent strong supermarket sales bode well for a robust A2 Milk result in August.

Foolish takeaway

All in all, I’m quietly bullish on the company’s August full-year result. The A2 Milk share price has already climbed higher in 2020 but a strong result could see it hit a new record high next month.

More reading

• How you can take advantage of the surging Australian dollar
• Top brokers name 3 ASX 200 shares to buy today
• Why Morgans thinks the Afterpay share price could be a reporting season hero
• Where to invest $10,000 into quality ASX 200 shares
• 4 ASX 200 shares to buy with $4,000

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Analysis: Is the A2 Milk share price a buy before August? appeared first on Motley Fool Australia.

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The Newcrest Mining Limited (ASX: NCM) share price will be one to watch on Thursday after the release of the gold miner’s fourth quarter and full year production update.

How did Newcrest perform in the fourth quarter?

Newcrest Mining had a very strong finish to the financial year and achieved its production guidance for FY 2020.

According to the release, Newcrest delivered group gold production of 573,000 ounces during the fourth quarter, up 7% on the prior quarter. This compares to the consensus estimates of 542,000 ounces.

This strong production was driven by its Cadia operation, which exceeded the top end of its guidance range. Cadia achieved record annualised mined ore and mill throughput for the quarter.

Newcrest achieved this with a quarterly all-in sustaining cost (AISC) of US$878 per ounce, resulting in an AISC margin of US$768 per ounce. The former compares to the consensus estimate of an AISC of US$887 an ounce.

FY 2020 production.

For FY 2020, Newcrest’s total gold production came to 2,171,118 ounces. While this was down 12.7% year on year, it was at the high end of its guidance range of 2,100,000 ounces to 2,200,000 ounces.

Newcrest’s full year AISC was US$1,044 an ounce, which led to a margin of US$668 an ounce for FY 2020.

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, was pleased with the company’s finish to FY 2020.

He said: “Newcrest has safely delivered a strong fourth quarter enabling us to meet our Group gold production guidance for the year, notwithstanding the challenges of addressing the risks associated with the COVID-19 pandemic. Cadia exceeded the top end of its production guidance range and achieved record annualised mine and mill throughput rates in the quarter, further highlighting the strength of this world-class asset.”

No guidance was given for FY 2021. Investors will need to wait until its results release in August for further details on that.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Newcrest Mining share price on watch after strong Q4 update appeared first on Motley Fool Australia.

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Short sellers. Love them or hate them, they’re a big part of today’s markets and the pricing of ASX shares.

These investors had a field day in March as the S&P/ASX 200 Index (ASX: XJO) plunged lower into a deep bear market.

After being scared off in recent months by the recovering market, short sellers are back. Here are some of the most shorted ASX shares as a percentage of their tradeable shares.

1. Myer Holdings Ltd (ASX: MYR)

According to ASIC’s short position reports, Myer is one of the most-shorted ASX shares right now.

Myer currently has 99.1 million short positions against it or 12.1% of total shares on issue. That means there are plenty of investors betting on a Myer share price fall in 2020.

There’s no doubt conditions are challenging for some Aussie retailers right now. Myer is starting to reopen its stores which could help sales but there are persistent headwinds.

The company’s debt and liquidity also have many investors betting against the ASX retail share. The recent withdrawal of trade credit insurer QBE Insurance Group Ltd (ASX: QBE) also doesn’t send a strong signal to stakeholders in the market.

2. Webjet Limited (ASX: WEB)

There are perhaps no surprises with this one. The Webjet share price has been smashed in 2020 and is down 68.2% for the year.

ASX travel shares have been hit particularly hard by the coronavirus pandemic. With no recovery for international tourism in the foreseeable future, the Webjet share price could remain under pressure for some time.

That’s certainly the view of the short sellers in the market right now. According to the latest ASIC report, there are 34.0 million short positions or 10.0% of total shares on issue for Webjet.

3. Zip Co Ltd (ASX: Z1P)

The Zip Co share price has been one of the big success stories of 2020. The buy now, pay later share is up 83.9% this year and 451.7% since 19 March.

However, that strong share price growth has drawn the attention of short sellers. ASIC has reported 27.8 million short positions or 7.1% of its total shares.

Buy now, pay later ASX shares have been among the strongest performers in 2020. Many believe the sector has turned into a ‘bubble’ and is now detached from reality.

Time will tell which camp is right, but short sellers appear to be putting their money where their mouths are.

Foolish takeaway

As the share market rises, short sellers appear to be getting more confident in their short positions. No one knows who will be right when it’s all said and done but it’s worth watching the ASX shares that short sellers are betting against right now.

More reading

• Why the Santos share price is back on my radar
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 drops 1.3%, Resolute Mining soars
• Top brokers list the latest ASX small cap stocks to buy today
• The ASX sector that’s heading for a V-shape recovery

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Warning: Investors are betting against these 3 ASX shares appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) may have been out of form on Wednesday, but that didn’t stop a number of shares from racing higher.

Some even managed to climb to 52-week highs or better despite the ASX 200 dropping 1.3%.

Three ASX shares that have achieved these milestones are listed below. Here’s why they are on a high:

HUB24 Ltd (ASX: HUB)

The HUB24 share price climbed to a 52-week high of $13.64 on Wednesday. Investors have been buying the investment platform provider’s shares after it continued its strong growth despite the pandemic. In fact, HUB24 recently revealed a record performance during the fourth quarter. It recorded a net inflow of $1.1 billion for the quarter, which together with favourable market movements, lifted its funds under administration by 14% or $2.1 billion to $17.2 billion. This means that its average monthly net inflows during FY 2020 was $412 million, up 26% from $326 million per month in FY 2019.

Marley Spoon AG (ASX: MMM)

The Marley Spoon share price stormed to a record high of $2.40 yesterday. Investors have been buying the meal kit delivery company’s shares after demand surged during the pandemic. This led to Marley Spoon’s first quarter revenue growing 46% on the prior corresponding period to 42.8 million euros. Another big positive was that this stronger than expected growth has accelerated its path to profitability. Next week Marley Spoon will be releasing its second quarter result and is tipped to reveal even stronger growth.

Whispir Ltd (ASX: WSP)

The Whispir share price continued its incredible run and hit a record high of $4.48 on Wednesday. This means the communications workflow platform provider’s shares are now up over 550% from their March low of 68 cents. As with the others, investors have been buying Whispir’s shares after the pandemic accelerated its growth. In its recent fourth quarter update, the company revealed annualised recurring revenue growth of 4.2% over the March quarter and 35.7% over the prior corresponding period to $42.2 million. This was driven by strong demand from new and existing customers.

More reading

• Add these ASX small cap shares to your watchlist immediately
• Market close: ASX 200 falls 0.5%
• Why Catapult, Eclipx, FlexiGroup, & Whispir shares are charging higher
• ASX 200 down 0.5%: Sydney Airport and South32 updates, HUB24 delivers record Q4
• HUB24 share price pushes higher on record Q4 performance

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd and Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Marley Spoon and these ASX shares are hitting new highs appeared first on Motley Fool Australia.

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Are ASX energy shares back in the buy zone? Judging by the market movements this week, it would certainly seem to be the case.

The Santos Ltd (ASX: STO) share price jumped 2.2% higher on Wednesday and could be a hot prospect.

Shares in fellow oil producer Beach Energy Ltd (ASX: BPT) surged 5.4% despite a 1.3% drop in the S&P/ASX 200 Index (ASX: XJO).

So, is now the time to get into the market, or should you hold off buying ASX energy shares?

Why did the Santos share price surge higher?

Energy was the only ASX sector to gain ground on Wednesday thanks to climbing oil prices.

Both West Texas Instruments (WTI) and Brent crude prices jumped more than 3% on Tuesday. That’s good news for oil producers like Santos and their potential earnings.

The Santos share price is now up 98.6% since 19 March. You might think that those sorts of gains mean you’ve missed the boat on Santos.

However, shares in the Aussie oil producer are still down 33.6% from where they started the year. To me, that says there is still potential upside from ASX energy shares in 2020.

Should you buy ASX oil shares again?

More often than not, a company’s share price drops for a reason. That was certainly the case with the Santos share price earlier this year.

Oil prices were under pressure thanks to an oil price war between OPEC+ and Russia. Oil price contracts even briefly went negative thanks to supply and demand imbalances.

The coronavirus pandemic has certainly been a big factor in 2020. More business shutdowns and less travel have reduced demand for oil.

That’s put the Santos share price under immense pressure in 2020 but investors have been willing to buy the dip.

The big question for me is whether or not coronavirus restrictions continue to ease. We’ve already seen a strong bounce back in economic activity in China.

If we see Australia pull off a similar recovery, oil prices could be heading higher in 2020.

I also think the recent oil shutdowns could bode well for medium to long-term oil price rises. That’s largely thanks to the current supply impacts being felt further down the line.

Foolish takeaway

The Santos share price has already rebounded strongly from the March bear market. However, the ASX energy share is still down 33.6% this year and could have more upside, particularly if we see a strong earnings result in August.

More reading

• Warning: Investors are betting against these 3 ASX shares
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 drops 1.3%, Resolute Mining soars
• Top brokers list the latest ASX small cap stocks to buy today
• The ASX sector that’s heading for a V-shape recovery

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Over the last 12 months the S&P/ASX 200 Information Technology index has provided investors with a return of 25.7% despite the pandemic.

This compares very favourably to a disappointing 10% decline by the S&P/ASX 200 Index (ASX: XJO) over the same period.

The good news is that I’m confident this outperformance can continue over the coming years. As a result, I think it would be a good idea to have decent exposure to the tech sector.

But which ASX tech shares should you buy? Three of my favourites are listed below:

Altium Limited (ASX: ALU)

The first ASX tech share to buy is Altium. It is an award-winning printed circuit board (PCB) design software provider. I think it is a strong buy due to its leadership position in a market exposed to the Internet of Things boom. I expect the proliferation of electronic devices to lead to increasing demand for its software over the next decade.

Appen Ltd (ASX: APX)

Another ASX tech share to buy is Appen. Its million-plus team of crowd sourced experts prepare the data that goes into the artificial intelligence and machine learning models of some of the biggest tech companies in the world. Given how these markets are expected to grow materially in the future, Appen looks well-placed to profit.

Megaport Ltd (ASX: MP1)

Finally, I think Megaport is an ASX tech share to buy. It is an elasticity connectivity and network services company. Its service allows users to increase and decrease their available bandwidth in response to their own demand requirements. This means users don’t need to be tied to a fixed service level on long-term and expensive contracts. Demand for its service has been growing very strongly thanks to the accelerating shift to the cloud, leading to stellar recurring revenue growth.

More reading

• How you can take advantage of the surging Australian dollar
• Get rich with these stellar ASX growth shares
• Where to invest $20,000 into ASX shares right now
• Why Kogan and these popular ASX shares just hit record highs
• 5 things to watch on the ASX 200 on Wednesday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium and MEGAPORT FPO. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Based on recent economic data, I think it is highly unlikely that the Reserve Bank will be lifting the cash rate any time soon.

While this is good news for borrowers, it is the very opposite for income investors.

Fortunately, all is not lost. This is because there are a large number of dividend shares on the Australian share market that offer vastly superior yields.

Two which I think income investors ought to consider buying are listed below:

Rural Funds Group (ASX: RFF)

I think that Rural Funds is one of the best ASX dividend shares on the local market. This is due to the quality of its assets, their blue chip tenants, and their ultra-long tenancy agreements. In respect to the latter, at the last count Rural Funds had a weighted average lease expiry profile of 11.5 years.

In addition to this, the company has fixed rental increases built into its tenancies. This means management has great visibility on its future earnings and also its distributions. As a result, it has been able to reaffirm its distribution guidance for both FY 2020 and FY 2021. For next year it intends to lift its distribution by 4% to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a yield of 5.5%.

Telstra Corporation Ltd (ASX: TLS)

There certainly is a lot of debate about the Telstra dividend. Some analysts believe the telco giant will have to cut its dividend further in the near future, others believe its forecast free cash flows will be sufficient to maintain it. I’m in the latter group and feel confident that 16 cents per share will be the bottom, even after the NBN compensation ends.

This is thanks to the cost savings being made by its T22 strategy, rational industry competition, and the easing of the NBN headwind. Based on the current Telstra share price, this will mean a fully franked 4.7% dividend yield.

More reading

• 3 of the best ASX blue chip shares you can buy right now
• 2 high yield ASX dividend shares to buy this week
• Why Morgans thinks the Afterpay share price could be a reporting season hero
• Why the Telstra share price is underperforming the market
• 2 ASX shares to buy during ‘Dry July’

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Wednesday the S&P/ASX 200 Index (ASX: XJO) ran out of steam and dropped notably lower. The benchmark index fell 1.3% to 6,075.1 points.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 set to rise.

It looks set to be a better day of trade for the ASX 200 on Thursday. According to the latest SPI futures, the benchmark index is expected to open the day 8 points or 0.13% higher. This follows a decent night of trade on Wall Street which saw the Dow Jones rise 0.6%, the S&P 500 climb 0.6%, and the Nasdaq push 0.25% higher.

Newcrest fourth quarter update.

The Newcrest Mining Limited (ASX: NCM) share price will be on watch today when it releases its fourth quarter and full year production update. According to a note out of Goldman Sachs, it is expecting quarterly gold production of 527,000 ounces. This compares to the consensus estimate of 542,000 ounces. This is expected to be achieved at an all-in sustaining cost (AISC) of US$860 an ounce. The consensus is expecting an AISC of US$887 an ounce.

Oil prices edge lower.

Energy producers such as Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) will be on watch today after oil prices edged lower. According to Bloomberg, the WTI crude oil price is down 0.2% to US$41.83 a barrel and the Brent crude oil price is down 0.15% to US$44.26 a barrel. A surprise build in U.S. inventories weighed on prices.

Gold price higher

It could be another positive day of trade for gold miners including Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST). Overnight the price of the precious metal surged to a seven-year high. According to CNBC, the spot gold price is up 1.5% to US$1,871.40 an ounce amid rising US-China tensions.

Budget day.

All eyes will be on Treasurer Josh Frydenberg today when he updates the nation on the state of the Australian economy. According to the ABC, Mr Frydenberg is expected to reveal the largest recorded deficit by an Australian government since World War II. Economists are tipping this deficit to be in the region of $200 billion in 2020-21.

More reading

• ASX 200 drops 1.3%, Resolute Mining soars
• Top brokers list the latest ASX small cap stocks to buy today
• The ASX sector that’s heading for a V-shape recovery
• QBE share price rises despite expected half year loss
• Are ASX tech shares in a bubble?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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