Why Gold Fields Stock Rose 54% in April
Shares of South Africa-based gold miner Gold Fields (NYSE: GFI) rose an impressive 54% in April according to data from S&P Global Market Intelligence. That came on the heels of a roughly 20% decline in March. However, the shares were down over 30% at one time during that month. The shift from a dour mood to a positive one was broad-based across the entire stock market between March and April, but the truth is, there are still material issues on the horizon.
Gold Fields has operations in Africa, Australia, and South America. It's all in sustaining costs are over $1,000 per ounce, so it's on the higher end of the production cost spectrum. And it has a key development project in the works. As COVID-19 started to spread across the globe, investors took a risk-off attitude in March, which helped push the stock price sharply lower. Reinforcing investors' negative view was the late March announcement that the company was temporarily closing a key asset in South Africa, the massive South Deep mine -- a government-mandated shutdown that was part of that country's attempts to stem the spread of the coronavirus.
When the company provided its first-quarter operational update, it reported a roughly 12% year-over-year production decline. Notably, gold was flat across the month, using SPDR Gold Shares as a proxy, which didn't provide much support to the stock in the face of broadly negative market sentiment.
Source Fool.com
