Gold miners slide as FTSE 100 cautious ahead of Federal Reserve …

Gold was on the slide again, pushing shares in precious metal mining companies sharply lower. Amid uncertain trading on stock markets ahead of the release of the latest US Federal Reserve minutes – which will be scoured for signs of the central bank’s view on future economic stimulus – Randgold Resources1 lost 126p to 44.95, making it the biggest faller in the leading index. African Barrick Gold2 dropped 10.7p to 181p and Fresnillo3 fell 9p to 904.5p.

Michael Hewson at CMC Markets said:

Gold has been a big slider today…. which suggests that the weak or benign inflation outlook is curbing demand for the precious metal. This afternoon’s weak inflation reading from the US tends to reinforce this weak outlook.

While inflation remains capped, the outlook for the yellow metal seems likely to remain weak irrespective of whether the Fed minutes are hawkish or dovish.

Ahead of the Fed minutes, St Louis Fed president James Bullard suggested the central bank might still look at easing back on its $85bn a month bond buying programme at its December meeting. He said a strong jobs figure for November would increase the prospect of tapering. Markets have been dominated by trying to work out when the Fed would turn off the money taps, but most observers believe it will not act until next year.

Meanwhile there were reports revisiting the idea that the European Central Bank might consider a negative deposit rate to boost growth, which sent the euro lower. The Bank of England’s latest minutes also suggested there would be no quick interest rate rise in the UK. Overall, the FTSE 100 finished 16.93 points lower at 6681.08.

Vodafone4 – tipped this week once more as a bid target – was among the fallers, down 4.85p to 227.2p as its shares were ex-dividend. Drinks group Diageo5 dipped 23.5p to 20.05 after an investor day on Tuesday, in which it moved away from its previous stance of giving forward guidance. Mike Dennis at Cantor Fitzgerald said:

Our overall take was that the outlook was for less top-line sales growth (below the 5%-8% net sales growth range and more price than volume) and less margin gains versus 2012 and 2013.

Diageo is facing less predictable growth patterns in Emerging Markets as GDP growth rates slow and, sales of their largest spirit brand, Smirnoff Vodka, slow too.

Building materials group Wolseley6, which has a strong presence in the US, slipped 21p to 32.29 after the American Institute of Architects’ Architecture Billings Index fell to 51.6 in October after hitting a seven-month high of 54.3 in September. But Aberdeen Asset Management7 moved higher in the wake of this week’s 660m acquisition of Scottish Widows from Lloyds Banking Group. It added 16.8p to 492p as Barclays and Berenberg both raised their price targets.

EasyJet8 jumped another 32p to 13.77 after its well received results. GlaxoSmithKline9 moved 3.5p higher to 1631.5p after raising 425m by selling part of its stake in South African drugmaker Aspen Pharmacare. Glaxo disposed of 28.2m shares in Aspen, leaving it with 12.4% of the business.

It will retain a seat on the board of the business and has agreed not to sell any further shares for at least six months. Among the mid-caps, engineering group Kentz Corporation climbed 13p to 555p after it won a $190m contract from Qatar Petroleum for industrial control systems for around 775 wells of the Dukhan oilfield in the middle east. On the day MPs quizzed bankers over the Royal Mail10 flotation price, the company was steady at 550p.

as a stream of City research was released. Analysts at UBS – which was one of the banks up before the select committee – issued a sell note with a 450p price target. Barclays was also negative, with an equal weight rating and a 466p price target.

Meanwhile rival UK Mail jumped 30p to 615p after half year profits rose 63% to 11.9m, boosted by a strong performance from its parcels business.

Dixons Retail11 impressed analysts after showing off its new Currys PC World store in Aylesbury and its shares added 0.62p to 49.02p.

Finally Bonmarch , the value retailer, began life on Aim with a 20.5p increase on the 200p issue price.


  1. ^ More from the Guardian on Randgold Resources (
  2. ^ More from the Guardian on African Barrick Gold (
  3. ^ More from the Guardian on Fresnillo (
  4. ^ More from the Guardian on Vodafone (
  5. ^ More from the Guardian on Diageo (
  6. ^ More from the Guardian on Wolseley (
  7. ^ More from the Guardian on Aberdeen Asset Management (
  8. ^ More from the Guardian on easyJet (
  9. ^ More from the Guardian on GlaxoSmithKline (
  10. ^ More from the Guardian on Royal Mail (
  11. ^ More from the Guardian on Dixons Retail (

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Gold miners slide as FTSE 100 cautious ahead of Federal Reserve …

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