Financial report forecast | Record-high gold prices exceed expectations - gold mining companies need to produce a "perfect score answer sheet"

The price of gold is hovering near historic highs, but Barrick Gold (GOLD.US) and Newmont Mining (NEM.US) have failed to profit from the rise in gold prices, disappointing investors. In the next 10 days, top producers have the opportunity to win back skeptical shareholders. As Barrick Gold prepares to kick off the latest earnings season for the gold industry on Wednesday, investors are closely watching whether the industry can bounce back from the disappointing third quarter. Both Barrick Gold and Newmont Mining posted third-quarter results below Wall Street expectations, partly due to higher-than-expected costs and production challenges. The world's second-largest producer, Barrick, will report fourth-quarter earnings, which are expected to include full-year production guidance. The third-largest mining company, Agnico Eagle Mines Limited (AEM.US), will release its report on February 13, and the largest producer, Newmont Mining, will report on February 20. As demand for safe-haven assets increases, gold prices have hit historic highs multiple times this year, steadily approaching $3,000 per ounce. The rise in gold prices has added pressure to the performance of these two companies, requiring them to prove to investors that they can leverage the rise in gold prices while addressing operational challenges and controlling costs. Veritas Investment Research Corp. analyst Martin Pradier said, "Rising gold prices typically indicate rising inflation. Therefore, the biggest question is: to what extent can these companies control costs?" Stocks of senior gold producers have rebounded. Bloomberg's index tracking 10 senior gold miners has surged 31% this year, nearly three times the increase in spot gold prices. Following last year's 11% increase, which lagged behind gold's 27% rise, this is helping the world's largest gold producer catch up. Imaru Casanova, portfolio manager at Van Eck Associates, said, "With gold at $2,900, the market is now saying 'show me the money.' As gold prices hit new highs, the market will focus on these companies' ability to expand profit margins." Despite this, Barrick and Newmont still lag behind some smaller peers, including Agnico Eagle Mines Limited, whose earnings often exceed expectations. Most of this Toronto-based mining company's mines are in operation in Canada. Barrick's stock price has been under pressure due to disputes with the military rulers in Mali, where the company operates one of its largest mining complexes. In January, Barrick suspended mining activities at Loulo-Gounkoto in Mali after the government began exporting gold from the mines and blocked exports from the country. Barrick is also facing operational setbacks at crucial mines in Papua New Guinea and the Dominican Republic, as well as dealing with high input costs in the US. Barrick, along with Newmont, jointly owns a large mine in Nevada. Newmont is also seeking cost reductions, as its third-quarter financial report showed increased operating expenses in Australia, Canada, Peru, and Papua New Guinea. Since then, the Denver-based company has been seeking to reduce management expenses, support its balance sheet, and has completed a series of asset sales, netting $4.3 billion. Bloomberg analyst Grant Sporre said, "Both companies had strong performances in the last quarter, they need to achieve this goal. Investors will expect Newmont and Barrick to significantly improve operational performance."