Gold price drop triggers mining stocks bloodbath – by Frik Els ( – August 24, 2016)

Gold struggled on Wednesday losing more than 1% to exchange hands for $1,327 in late afternoon trade in New York. Gold is coming off two-year highs hit early this month and year to date the metal is still up more than 25% or nearly $270 an ounce.

Some of the biggest drivers of 2016 gold price surge have begun to lose steam in recent weeks. Large scale gold futures and options speculators or “managed money” investors such as hedge funds have been scaling back bullish bets recently and the frenzied buying of physically-backed gold ETFs have also moderated (see graph).

Hansen, chief commodity strategist at Saxo Bank, says while the fundamental drivers still support a higher gold price, but these investment flows have started to flash warning signals which “could indicate that gold, just like in May, could be facing another correction.”

Worries about the outlook for the price was evident among gold mining stocks on Wednesday with heavy selling across the board which only accelerated towards the close.

Barrick Gold Corp (NYSE:ABX, TSE:ABX) fell 9.6% with more than 30 million shares changing hands pushing the shares to its lowest level since the beginning of June. At a market value of $20.8 billion in New York, the Toronto-based company has now lost its status as the most valuable gold mining company in the world.

For the rest of this article, click here:

Comments are closed.