<<Gold stocks taken down by Greenspan
By Mike Maynard, CBS MarketWatch.com
Last Update: 1:43 PM ET July 15, 2003
WASHINGTON (CBS.MW) -- Gold futures extended their selloff Tuesday, pressuring gold stocks toward session lows, after Alan Greenspan said little to support the idea of a return of inflation.
The nation's central bank chief testified about the economy on Capitol Hill. Investors often flock to gold as a hedge against inflation and other economic turmoil that upsets the value of other assets.
The selloff in gold coincided almost exactly with the release of Greenspan's prepared testimony before the House Financial Services Committee. See related story.
As Greenspan's question-and-answer session with lawmakers drew to a close, gold for August delivery traded all the way down to $341.80 an ounce, off $6.50 on the session. More recently, the benchmark contract stood at $342.10, down $5.70.
Gold stocks fared no better. The Philadelphia Gold and Silver Index (XAU: news, chart, profile) retreated 2.8 percent to 76.25, the Amex Gold Bugs Index (HUI: news, chart, profile) lost 3.3 percent to 146.82 and the CBOE Gold Index (GOX: news, chart, profile) dropped 2.6 percent to 63.72.
Among individual issues, Agnico-Eagle Mines (AEM: news, chart, profile) set the pace for decliners, dropping 3.8 percent to $11.14.
Canadian-based stocks such as Agnico-Eagle were also roiled by the Bank of Canada's unexpected quarter-point cut in the overnight target rate to 3 percent.
Three other Canadian miners -- Placer Dome (PDG: news, chart, profile), down 3.3 percent to $11.60; Kinross Gold (KGC: news, chart, profile), down 3.7 percent to $5.94; and Barrick Gold (ABX: news, chart, profile), down 1.7 percent to $17.10 -- also were in retreat.
Elsewhere, Newmont Mining (NEM: news, chart, profile) dropped 2.4 percent to $32.41.
One London-based market observer remains bullish on the outlook for gold, however.
James Moore, analyst at TheBullionDesk.com, said in a note to clients that he expects continued fund buying to prop up the precious metal, noting that gold futures broke through a 100-day moving average on Monday.>> |
