Everything You Need to Know on Friday: Gold Miners Crippled by Costs Risk Losing Out on Bullion's Boom

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,472.20, up 0.03% from previous close

● Size of Ottawa's cuts to immigration targets takes business by surprise

● Gold Miners Crippled by Costs Risk Losing Out on Bullion’s Boom

● Natural gas producers await LNG Canada's start, but will it be the fix for prices?

Today, the Canadian dollar is trading at 72.37 US cents, a slight increase from the previous close.

Businesses and economists were taken by surprise when Justin Trudeau’s government significantly reduced Canada’s annual immigration targets on Thursday.

A reduction was on the cards, but not many expected a reduction of about 21 per cent to 395,000 newcomers in 2025 and 380,000 in 2026. The target for 2024 was about 485,000.

The targets have generally been maintained or increased for more than a decade, but the federal government decided to go against the trend due to declining job vacancies, rising unemployment — especially among newcomers and younger people — and growing concerns about affordability.

“We were not expecting such a significant decrease,” said Diana Palmerin-Velasco, a senior director at the Canadian Chamber of Commerce, which represents more than 200,000 businesses. “I have been hearing from employers who are also surprised and shocked. It’s not clear what is really the evidence for taking these decisions.”

Immigration plays a key role in the country’s economy, with newcomers accounting for more than one-third of the workforce in industries such as accommodation and food services, transportation and warehousing, and the professional, scientific and technical sectors, according to Statistics Canada. The country’s aging population is another reason why there’s a high reliance on immigrants.

Gold prices are at record highs. But disappointing results at the world’s largest miner of the yellow metal signals companies may be struggling to capitalize on sizzling demand.

Analysts had high hopes for the industry, with gold among the best-performing commodities this year, surging more than 30% on the outlook for lower interest rates and geopolitical turmoil. But Newmont’s results revealed that big gold producers are still wrestling with inflationary pressures, especially regarding labor costs, that have lasted longer than expected.

“There’s a potential read-through here, assuming Newmont’s takeaways are accurate, that this is a risk factor for the industry,” said Josh Wolfson, a mining analyst with Royal Bank of Canada.

Newmont earned 80 cents a share, well short of the average estimate of 89 cents among analysts surveyed by Bloomberg. Revenue of $4.61 billion also trailed estimates, as did its gross profit margin, which slipped below 50%.

Natural gas producers in Western Canada have white-knuckled it through months of depressed prices, with the expectation that their fortunes will improve when LNG Canada comes online in the middle of next year.

But the supply glut plaguing the industry this fall is so large that not everyone is convinced the massive facility’s impact on pricing will be as dramatic or sustained as once hoped.

As the colder temperatures set in and Canadians turn on their furnaces, natural gas producers in Alberta and B.C. are finally starting to see some improvement after months of low prices that prompted some companies to delay their growth plans or shut in production altogether.

“We’ve pretty much been as low as you can go on natural gas prices. There were days when (the Alberta natural gas benchmark AECO price) was essentially pennies,” said Jason Feit, an advisor at Enverus Intelligence Research, in an interview.

“As a producer, it would not be economic to have produced that gas . . . It’s been pretty worthless.”