Barrick Gold Corp. tumbled to a 24-year low in Toronto, leading a rout among bullion miners, after a selloff in the price of the metal.
Barrick, the world’s biggest gold producer, dropped as much as 6.5 percent to C$11.19 in Toronto, the lowest intraday price since May 1991, before closing at $11.35. Goldcorp Inc., the biggest North American producer by market value, finished down 6.1 percent and Newmont Mining Corp., the largest U.S. producer, fell 3.2 percent in New York.
Gold tumbled Friday on strength in the U.S. dollar and signs of improving U.S. economic growth.
“The market’s focus has turned back to the U.S. dollar, away from the safe-haven bid, and there is simply no support for gold prices at this point,” Jessica Fung, a Toronto-based commodities analyst at BMO Capital Markets, said Friday by phone. The market’s attention has temporarily shifted away from concerns about Greece and the Chinese stock market, she said.
Gold futures for August delivery closed down one percent at $1,131.90 an ounce on the Comex in New York, after touching $1,129.60, the lowest since April 2010.
Other precious-metal miners fell. The Philadelphia Stock Exchange Gold and Silver Index, a gauge of miners, finished down 4.74 percent, reaching the lowest intraday since January 2002. Among Toronto-based gold miners, Kinross Gold Corp. closed down 6.8 percent, Agnico Eagle Mines Ltd. fell 4.8 percent and Yamana Gold Inc. fell 5.2 percent.
The markets are focused on the extent to which the U.S. may raise interest rates, Sean Boyd, the Vice-Chairman & chief executive officer of Agnico Eagle, said in an interview on Friday.
“So there could be continued pressure on gold equities, there could be continued pressure on the gold price, until we get some direction on interest rates,” he said.
Barrick is under particular pressure as the drop in gold casts doubt on the company’s strategy of shedding assets to pay down its $12.9 billion debt, Ron Stewart, an analyst at Macquarie Capital Markets in Toronto, said Friday in a telephone interview.
“Barrick was doing OK with this notion of selling assets to reduce the debt levels and repair their balance sheet,” he said. “It becomes harder and harder to sell those assets at any kind of reasonable value if metal prices are unwinding.”
Barrick’s total debt peaked at $15.8 billion in the second-quarter of 2013, the same year gold futures had their biggest annual plunge in more than three decades. Since then, the company has sold more than $2 billion worth of assets and has been in talks to sell a 50 percent stake in its Zaldivar mine in Chile.
January 11, 2016