Barrick Gold stock (NYSE: GOLD) has declined by about 6% year-to-date.The underperformance comes despite the fact that gold prices have been trending a bit higher, rising from levels of around $1,800 per ounce in early January to levels of over $1,900 currently, driven by cooling inflation, slower interest rate hikes by the Federal Reserve, and concerns about the U.S. banking system. However, Barrick has been weighed down by weaker production rates. Over Q2 gold production was 3% lower year-over-year to 1.01 million ounces, partly due to scheduled maintenance on processing facilities at Carlin mine, although it did rise by 6% sequentially. Copper production declined 11% year-over-year. The lower production also meant that average per-unit costs trended higher, impacting profitability. For example, the company says that all-in-sustaining costs for gold climbed 12% year-over-year to $1,355 per ounce from $1,212 per ounce. Costs for copper also rose to $3.13 per pound from $2.87 per pound a year ago. That being said, things are likely to get better going forward.
Notably, GOLD stock had a Sharpe Ratio of 0.1 since early 2017, which is lower than the figure of 0.6 for the S&P 500 Index over the same period. Compare this with the Sharpe of 1.2 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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