Contrasting results for world's top two gold firms

By Steve James

NEW YORK (Reuters) - On a day when the price of gold hit a 28-year high, the world's top two gold miners reported contrasting third-quarter results.

Canada's Barrick Gold Corp (ABX.TO: Quote, Profile, Research, Stock Buzz) (ABX.N: Quote, Profile, Research, Stock Buzz), the largest producer, said on Wednesday its profit fell 15 percent on lower sales and rising costs. It also forecast 2007 gold production of 8.1 million ounces, at the low end of its previous outlook.

But rival Newmont Mining Corp (NEM.N: Quote, Profile, Research, Stock Buzz) reported earnings in the quarter doubled, easily surpassing Wall Street expectations and boosting the Denver-based company's stock by more than 9 percent.

Both results came on a day when oil hit a record high past $95 a barrel and gold rose to a 28-year high as the dollar fell after the Federal Reserve cut a benchmark interest rate.

Gold is often seen by investors as a safe haven in times of economic uncertainty, and gold futures were buoyed on Wednesday by both the weaker dollar and the surge in crude oil prices.

Spot gold <XAU=> rose to $795.40/796.20, versus $781.25/781.85 in New York late on Tuesday, passing Monday's peak of $794.40 -- the highest level since January 1980 -- to a high of $796.50.

While Newmont narrowed its forecast for fourth-quarter sales because of "operational challenges" in Nevada, analysts were impressed with its operational results under new Chief Executive Officer Richard O'Brien.

Since succeeding Wayne Murdy as CEO on July 1, O'Brien has focused on Newmont's leverage to the gold price. He eliminated the hedging book, moved to sell or spin off its merchant banking business, and made a major acquisition -- a pending $1.52 billion deal for Canada's Miramar Mining Corp MAE.TO.