Morning Note: Market News and a positive update from Newmont Mining.

Market News

Donald Trump said he didn’t see the need to fire Jerome Powell, making it clear he saw lowering rates as a more pressing concern. The two publicly traded barbs over the Fed’s cost overruns during their tour of the project. The dollar rose 0.2%, while Treasuries were weaker with some curve flattening – the 10-year yields 4.40%. Gold slipped back to $3,355 an ounce, while Brent Crude trades at $69 a barrel.

The European Central Bank’s Martins Kazaks said in an interview that there’s “no urgent need” to move on rates, reinforcing views that another hold is the baseline scenario for the September meeting.

India’s commerce minister expressed optimism about reaching a trade deal with the US before the deadline, though hurdles remain. South Korea and the US pledged to reach an agreement by 1 August. Volkswagen cut its outlook for the year as tariffs weigh on Audi and Porsche margins

US equities continued to tick higher last night – S&P 500 (+0.1%); Nasdaq (+0.2%) – while in Asia this morning, markets saw a bit of profit-taking: Nikkei 225 (-0.9%); Hang Seng (-1.0%); Shanghai Composite (-0.3%). The yen gained after Bloomberg News reported Bank of Japan officials see the possibility of mulling another interest rate hike this year.

The FTSE 100 is currently 0.3% lower at 9,106, while Sterling trades at $1.3470 and €1.1460. UK households are more inclined to save money than at any point since 2007 as they build “contingency funds” amid fears of further tax rises in the autumn, Gfk said.

Source: Bloomberg

Company News

Yesterday lunchtime Newmont Mining Corp. released its Q2 2025 results which came in ahead of market expectations driven by the strong gold price and good cost control. The company continued to return capital to shareholders and reiterated its targets for 2025. The shares have been a strong performer this year, although we believe there is potential for a further rally given that gold stocks remain well below their highs at a time when the commodity price trades close to a record level. In after-hours trade, they were marked up by 4%.

Newmont is the world’s largest gold company and a producer of copper, silver, zinc and lead. This follows a transformational period during which the company bought US-listed Goldcorp for $10bn and Australia’s Newcrest Mining for $17bn. The company also entered into the Nevada Gold Mines joint venture with Barrick Gold – its 38.5% stake provides exposure to the single largest gold-mining complex in the world. In order to retain focus, Newmont has also divested of non-core assets – the company expects to receive more than $3.0bn in after tax cash proceeds from the divestiture program this year including $2.5bn from divested assets and $470m from the sale of equity shares in Greatland Resources and Discovery Silver.

Newmont now operates a world-class portfolio of assets and prospects in favourable mining jurisdictions in Africa, Australia, Latin America & Caribbean, North America, and Papua New Guinea. The portfolio includes more than half of the world’s Tier 1 mines.

At the end of 2024, the company declared total reserves of 134m attributable gold ounces and resources of 170m attributable gold ounces. There is also significant upside from other metals, including more than 13.5m tonnes of copper reserves.

The company says that every $100 an ounce change in the gold price adds just over $500m to the group’s revenue. With the current gold price ($3,360 an ounce) well above the company’s price assumption ($2,500 an ounce) and the expected cost of sales ($1,620 an ounce), Newmont should be able to generate significant cash flow over the medium term. As a result, the company provides an attractive way to gain exposure to the gold price, albeit with the operational and political risks that come with a production company.

In Q2 2025, attributable gold production fell by 8% to 1.48m ounces, primarily made up of 1.12m gold ounces from core Newmont’s Tier 1 portfolio, as well as 36k tonnes of copper.

The decline was due to divestitures of non-core assets, partially offset by increased production at Yanacocha from improved injection leaching and Peñasquito from higher gold grades. The company has halted operations at the Red Chris Mine following a ground collapse incident.

The gold price has rallied so far this year, driven by global geopolitical and macro-economic uncertainty, exacerbated by the Trump administration, and continued central bank bullion buying.  During Q2, Newmont realised a gold price of $3,320 per ounce, up 41% versus the previous year.

The group’s direct operating costs are made up of labour (50%), materials & consumables (30%), fuel & energy (15%), and other (5%). During Q2, total all-in sustaining costs (AISC) rose by 2% to $1,593/ounce (and below the 2025 target) and, as a result, cash profits (EBITDA) increased by 52% to $2,997m, while adjusted net EPS doubled from 72c to 143c, well above the market forecast of 118c.

Capital investment fell back from $800m to $674m, although the company continued to progress major capital projects. The business generated a record quarterly free cash flow of $1.7bn, versus $574m in Q2 last year. This left gearing at only 0.1x net debt to EBITDA, with $10.2bn in total liquidity.

The company repurchased $605m of its shares since the last earnings call as part of the $3.0bn programme authorised by the Board through to October 2026 and declared a quarterly dividend of $0.25 per share. The authorisation has been raised by a further $3bn to be executed at the company’s discretion.

The company remains on track to achieve its 2025 guidance. Excluding the non-core assets held for sale, the group expects gold production of 5.6m ounces from the core Tier 1 portfolio. All-in sustaining costs are expected to be $1,620 an ounce for the core portfolio. Sustaining capital expenditure (i.e. maintenance) is expected to be $1.8bn, with development spend of $1.3bn.

Source: Bloomberg