Investing.com -- Gold producers are heading into a mixed third-quarter earnings season as lower gold prices and elevated costs put pressure on margins, partly offset by expected improvements in production, RBC Capital Markets said.
Average gold prices fell 6% quarter over quarter to $4,266 an ounce in the third quarter, from $4,513 in the second quarter. The decline is expected to weigh on margins for a second consecutive quarter, although some miners should begin benefiting from production improvements previously forecast for the second half.
RBC said execution will be particularly important through year-end because several companies have production profiles weighted towards the fourth quarter. It also warned that consensus estimates for 2027 capital spending and costs appear too low, creating the risk of downward revisions as companies provide initial budget guidance.
Gold producers remain financially strong, with many holding net cash positions and returning substantial capital to shareholders. However, RBC expects investors to scrutinise operational delivery and whether companies increase spending on growth projects and acquisitions.
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