Thursday March 20, 02:34 PM
Gold-mining ETF falls for a fourth session on dollar rally, weaker gold
NEW YORK (Thomson Financial) - The Market Vectors-Gold Miners ETF (GDX) slumped for a fourth consecutive session Thursday as the yellow metal continued its downward trend amid strength in the dollar and weaker gold prices.
The ETF fell 5.2% to $46.80 in recent trading, and has lost roughly 17% so far this week. The fund remains up about 2% since the beginning of the year.
Gold prices have come under heavy selling pressure over the past two sessions after the Federal Reserve cut rates less than market had expected, boosting the U.S. dollar and reducing gold's appeal as an alternative investment.
Gold futures for April delivery fell $23.90, or 2.5%, to $921.80 an ounce on the New York Mercantile Exchange, after touching a low of $904.70 earlier, $129.20 below its record high of $1033.90 hit on Monday.
The Dollar Index, which tracks the greenback against a basket of the world's major currencies, rallied 1% to 72.895.
'The smaller-than-expected fed funds rate cut and the emphasis on inflation risk in the Federal Open Market Committee statement have effected a reassessment of the further outlook for US monetary policy,' said analysts at Dresdner Kleinwort. 'As the market regards the potential for another rate cut as small, gold and other metals are under pressure.'
James Moore of TheBullionDesk.com said that given the strong gains seen across the complex this quarter and the aggressive influx of investor hot money in recent weeks, 'it comes as no great surprise that the metals correction has been just as swift and aggressive.'
'As well the precious metals have been fulfilling their role as a safe-haven asset as credit market tightness and rising margin requirements increase the need to generate cash,' he wrote to clients. 'Given the proximity to quarter-end and the Easter holidays gold will remains vulnerable to profit taking,' he said.
Among individual gold stocks, shares of Barrick Gold Corp. fell 4.8% to $43.12, Newmont Mining Corp. dropped 4% to $46.77, and Goldcorp (G.TO - news) . tumbled 3.9% to $37.22.
AngloGold Ashanti Ltd (Brussels: ANG.BR - news) . shed 3.5% to $30.96, while Gold Fields Ltd (Brussels: GFLB.BR - news) . slipped 2.9% to $14.44 and Kinross Gold Corp (K.TO - news) . slumped 2.6% to $21.41.
Yamana Gold (YRI.TO - news) fell 5.7% to $15.66 and Agnico Eagle Mines Ltd (AEM.TO - news) . lost 2.5% to $66.40.
Wanfeng Zhou
wz/tk1
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