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Johannesburg - Gold miners dragged the JSE down on Monday as the price of the yellow metal plummeted over $100 on the day. The drop came after China issued GDP growth numbers that came in well below consensus.
China is the world's second-largest buyer of gold.
At 17:00 the All Share [JSE:J203] index closed 1.62% lower at 38 003.70 points. Gold miners dropped 6.82% weaker‚ platinums shed 4.86% and resources lost 3.19%. Banks gave up 3.05%.
At 17:05 local time gold was quoted at $1 367.92/oz‚ down $115 22‚ or 7.77%‚ from its previous close‚ while platinum was down 3.60% at $1 421/oz.
Major European markets were lower‚ with London’s FTSE 100 down 0.62% at 16:50 local time.
“The fall in gold counters was a reaction to the meltdown in the price of bullion‚ which has lost $200 since late last week‚” said Ryan Wibberley‚ equity dealer at Investec Asset Management in Cape Town.
“The fall is not due to one single factor - it is a perfect storm. Goldman Sachs‚ Citigroup and Deutsche Bank cut back on their gold price forecasts last week and there were reports that Cyprus may have to sell some gold reserves. This led investors to wonder which European country was going to dump gold next‚ which also added to the lower price‚” he said.
“The selling of exchange traded funds also contributed to the fall in the metal‚ which dropped through several technical levels‚ triggering stop losses all the way down‚” he said.
“I do not know if gold has found its floor yet as it may continue to fall‚” he said.
Weak Chinese first quarter economic numbers also weighed on world bourses‚ as the GDP growth of the world’s biggest consumer of commodities came in at 7.7% on Monday from an expected 8%.
Industrial production also fell short of expectations spurring concerns that a global economic recovery could be derailed.
Meanwhile US stocks' declines gathered steam midmorning‚ on worries about economic growth in China and a steep tumble in commodity prices‚ Dow Jones Newswires reported.
At 16:50 local time the Dow Jones industrial average was 0.43% lower.
A better-than-expected earnings report from Citigroup provided some insulation from the macro concerns. The bank reported first-quarter earnings that topped earnings expectations‚ leading to a higher stock price.
On the JSE bullion counter Harmony (HAR) plummeted 8.87% to R45.61‚ AngloGold Ashanti (ANG) slid 7.26% to R175 and Sibanye (SGL) slid 9.33% to R10.79.
Mining giant Anglo American (AGL) dipped 2.66% to R219.75‚ rival BHP Billiton (BIL) was down 1.82% at R253.66 and Sasol (SOL) dropped 4.47% to R370.65.
Exxaro (EXX) retreated 3.06% to R145.16 and Kumba Iron Ore (KIO) closed 3.85% lower at R437.
In the platinum sector Impala (IMP) dropped 5.67% to R116.02‚ Lonmin (LON) gave back 5.55% to R35.93‚ Aquarius (AQP) lost 6.33% to R5.92 and Jubilee (JBL) shed 4.17% to R1.15.
Standard Bank (SBK) lost 4.21% to R110.17 and FirstRand (FSR) relinquished 2.63% to R31.16.
China is the world's second-largest buyer of gold.
At 17:00 the All Share [JSE:J203] index closed 1.62% lower at 38 003.70 points. Gold miners dropped 6.82% weaker‚ platinums shed 4.86% and resources lost 3.19%. Banks gave up 3.05%.
At 17:05 local time gold was quoted at $1 367.92/oz‚ down $115 22‚ or 7.77%‚ from its previous close‚ while platinum was down 3.60% at $1 421/oz.
Major European markets were lower‚ with London’s FTSE 100 down 0.62% at 16:50 local time.
“The fall in gold counters was a reaction to the meltdown in the price of bullion‚ which has lost $200 since late last week‚” said Ryan Wibberley‚ equity dealer at Investec Asset Management in Cape Town.
“The fall is not due to one single factor - it is a perfect storm. Goldman Sachs‚ Citigroup and Deutsche Bank cut back on their gold price forecasts last week and there were reports that Cyprus may have to sell some gold reserves. This led investors to wonder which European country was going to dump gold next‚ which also added to the lower price‚” he said.
“The selling of exchange traded funds also contributed to the fall in the metal‚ which dropped through several technical levels‚ triggering stop losses all the way down‚” he said.
“I do not know if gold has found its floor yet as it may continue to fall‚” he said.
Weak Chinese first quarter economic numbers also weighed on world bourses‚ as the GDP growth of the world’s biggest consumer of commodities came in at 7.7% on Monday from an expected 8%.
Industrial production also fell short of expectations spurring concerns that a global economic recovery could be derailed.
Meanwhile US stocks' declines gathered steam midmorning‚ on worries about economic growth in China and a steep tumble in commodity prices‚ Dow Jones Newswires reported.
At 16:50 local time the Dow Jones industrial average was 0.43% lower.
A better-than-expected earnings report from Citigroup provided some insulation from the macro concerns. The bank reported first-quarter earnings that topped earnings expectations‚ leading to a higher stock price.
On the JSE bullion counter Harmony (HAR) plummeted 8.87% to R45.61‚ AngloGold Ashanti (ANG) slid 7.26% to R175 and Sibanye (SGL) slid 9.33% to R10.79.
Mining giant Anglo American (AGL) dipped 2.66% to R219.75‚ rival BHP Billiton (BIL) was down 1.82% at R253.66 and Sasol (SOL) dropped 4.47% to R370.65.
Exxaro (EXX) retreated 3.06% to R145.16 and Kumba Iron Ore (KIO) closed 3.85% lower at R437.
In the platinum sector Impala (IMP) dropped 5.67% to R116.02‚ Lonmin (LON) gave back 5.55% to R35.93‚ Aquarius (AQP) lost 6.33% to R5.92 and Jubilee (JBL) shed 4.17% to R1.15.
Standard Bank (SBK) lost 4.21% to R110.17 and FirstRand (FSR) relinquished 2.63% to R31.16.
