AngloGold Ashanti Plc (JSE: ANG), a prominent player in the gold mining industry, has experienced a rollercoaster ride in its share price over the past year. Despite closing 2023 with a modest 7% gain, the company faced a significant setback as it relinquished a staggering 70% gain earlier in the year.
The company’s challenges were underscored by its half-year 2023 results, revealing a stark contrast to the previous year’s performance. Despite reporting marginal increases in sales revenue and average gold price received per ounce, AngloGold Ashanti saw a 21.5% year-on-year decrease in EBITDA, amounting to $678 million. This decline translated into headline earnings of $140 million, nearly halving its achievements from the preceding year.
One of the key contributors to this downturn was a notable increase in total cash costs per ounce outpacing revenue growth, soaring by 11% to $1,189/oz in the first half of 2023. Factors such as heightened operating costs due to inflationary pressures, increased waste stripping expenses, and higher royalties resulting from stronger revenues significantly impacted the company’s bottom line.
Technical
AngloGold Ashanti’s share price has embarked on a journey of consolidation following a sharp downturn in May 2023. Currently, the share price is oscillating around its 100-day moving average, symbolic of the market’s indecisiveness regarding its future trajectory. A symmetrical triangle pattern visually represents this consolidation phase, where the share price’s highs and lows gradually converge.
Key levels have emerged within this pattern: a sturdy support at ZAR 302.14 per share, aligning with the lower boundary of the symmetrical triangle, and a formidable resistance at ZAR 357.25 per share, marking the upper boundary. These levels serve as crucial benchmarks for traders and investors alike as they gauge the stock’s future movement.
With earnings looming on Friday, February 23, market participants eagerly await the release of financial figures. The impending earnings report could serve as a catalyst, potentially propelling the share price beyond the confines of the symmetrical triangle pattern. A breakout in either direction could trigger an extended move, with ZAR 302.14 per share support or ZAR 357.25 per share resistance levels acting as potential targets, contingent upon the breakout’s direction.
Summary
AngloGold Ashanti’s turbulent journey, marked by share price fluctuations and financial challenges, underscores the complexities of the gold mining industry. As it navigates through consolidation around key technical levels, including support at ZAR 302.14 and resistance at ZAR 357.25, market anticipation builds ahead of crucial earnings, highlighting the pivotal role of financial performance in shaping investor sentiment and stock movement.
Sources: AngloGold Ashanti Plc, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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