Gold Fields, Ltd. (JSE: GFI) has navigated choppy waters in 2024, experiencing a 13.5% decline year-to-date and a steeper 21% drop since December 14th. While recent gains offer a flicker of hope, a confluence of company-specific issues and broader industry headwinds cast shadows over the gold miner’s immediate future
On the one hand, Gold Fields faces challenges. Missed production targets, rising costs, and delays in ramping up the Salares Norte mine have dampened investor sentiment. These factors, coupled with broader macroeconomic headwinds like rising interest rates, have contributed to the recent decline.
However, there are reasons for optimism. Gold Fields’ 2023 performance was strong, and the recent gains suggest a potential reversal of the downtrend. Additionally, the company is taking steps to address its challenges, such as streamlining operations and exploring new cost-saving measures.
The 1-day chart paints a picture of indecision as the price action trades around the crucial 61.80% Fibonacci retracement level, a potential pivot point for direction. A recent break below the 50-SMA (blue line), 100-SMA (orange line), and 200-SMA (red line) suggest bearish pressure, but significant support at 22,777 cents prevents further downside.
Currently, GFI hovers around the 61.80% Fibonacci retracement level, a critical juncture for determining the immediate trend. A decisive push above this level could pave the way for a rally towards the 50.00% retracement (25,380 cents) and further resistance at 27,548 cents. This bullish scenario would be fuelled by renewed buying momentum and potentially signify a reversal of the recent downtrend.
However, the downward-sloping RSI (40.12) hints at potential downside bias in the short term. Should the bears regain control, GFI could retest the 22,777 cents support level. A further breach might expose 21,373 cents as the next line of defence.
Gold Fields stands at a precarious juncture. Company-specific challenges and industry headwinds create a choppy near-term outlook. However, the potential for a bounce is present. A break above the 61.80% Fibonacci level could send GFI towards 25,380 and 27,548 cents. Conversely, a dip below 22,777 cents could test 21,373 cents.
Sources: TradingView, Trading Economics, Reuters, Dow Jones Newswire.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.