Gold is a chemical element with the symbol Au and the currency code is XAU. It is a highly sought-after precious metal which, for many centuries, has been used as money, a store of value and in jewelry. The metal occurs as nuggets or grains in rocks, underground "veins" and in alluvial deposits. Modern industrial uses include dentistry and electronics, where gold has traditionally found use because of its good resistance to oxidative corrosion.
Gold equities pull back sharply on Wall Street
The US Commerce Department reported a 0.5% drop in consumer spending this afternoon, which triggered a period of volatility in financial markets. In response to the report, the US Dollar strengthened as traders and investors moved back into the perceived safety of the dollar and out of higher yielding assets, which in turn applied pressure on gold.
On the Chicago Mercantile Exchange, gold futures have dropped over $8/ounce to change hands at around $1,038.
The US dollar delivered another positive trading performance yesterday, as ‘risk’ money returned to the dollar from higher yielding currencies. The move followed after worse-than-expected US consumer confidence data raised doubts of US demand, which could stall a global recovery that has become increasingly priced into financial markets.
Gold equities in New York and Toronto were hit hard by the weaker gold price. New Gold (AMEX:NGD) and Agnico Eagle (NYSE: AEM) were among the heaviest to fall, losing 6% each on Friday. Mexico focused junior producer Minefinders (AMEX: MFN) and South American focused Exeter Resources (AMEX: XRA, TSX: XRC) fell 5.5% while Canadian based Yamana Gold (NYSE: AUY) was particularly weak also, dropping 5%.
Ontario based Rubicon (AMEX: RBY), dual listed Eldorado Gold (TSX: ELD; AMEX:EGO) and International Gold Producer Randgold Resources (NYSE: GOLD, LSE: RRS) all slipped a further 4%. Nevsun Resources (AMEX: NSU), IAM Gold (NYSE: IAG), Keegan Resources (AMEX: KGN) and the world’s largest gold miner Barrick Gold (NYSE: ABX) all fell 3%.
In Toronto, Timmins Gold (TSX-V: TMM) was the one of the few gold stocks to rise, advancing nearly 3%. Victoria Gold Corp (TSX-V) was the weakest in Canada slipping 6% lower, meanwhile multi listed Centamin Egypt (LSE: CEY, ASX: CNT, TSX: CEE) and Hawthorne Gold Corp (TSX: HGC) traded 4% lower.
In the OTC market, low-cost emerging gold producer Gold Resource Corp (OTCBB: GORO) was also trading lower, losing around five percent.