Gold price goes into retreat
The sharp drop in the price of gold for the second time in a month rattled Australia's fourth largest mineral export industry, with gold producers making up seven of the top 10 losers on the benchmark ASX200 index on Thursday. Gold fell to $US1375 an ounce late on Thursday, sinking more than 2 per cent in a five-day losing streak that saw it hit two-year lows.
Copper fell to its lowest level in nearly two weeks on soft data from the US, Europe and China.
Iron ore, Australia's biggest export item, fell to a low of $US126.40 a tonne for the year.
Morgan Stanley commodities analyst Joel Crane said while the fundamentals in commodities remained good, "the issue is that many investors clearly feel there are more compelling places to invest at the moment".
"Uncertainty over growth and stronger supply growth is causing people to look elsewhere."
FC Stone analyst Edward Meir said he expected gold prices to keep softening, reversing a rally after the price collapse in April: "I think we could eventually test those old lows and take them out over the course of the summer."
Shares in goldminer Newcrest Mining fell 5.3 per cent to finish at $15.02, while Evolution Mining, Australia's fourth biggest gold producer, recorded a sharp 11.23 per cent fall in its share price to close at 83¢.
Mr Crane said recent weakness in the prices of commodities was driven by uncertainty over China's macroeconomic outlook and a slowing in demand growth. Despite the softness in the commodities market, he said he believed most prices were bottoming out as the downward pressures reduced.
"Commodities are generally quite forward-looking, and the market was right to pare back at the beginning of the year," Mr Crane said.
Jordan Eliseo, chief economist at precious metal supplier ABC Bullion, said the market was in a "corrective phase".
"Undoubtedly, the incredible rally in the US dollar ... has weighed down sentiment in precious metals due to the inverse correlation with the dollar and gold," Mr Eliseo said.
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The article says gold slipped below US$1,400 as commodities weakened on soft global economic data and a strengthening US dollar. Analysts also pointed to uncertainty over growth and rising supply as reasons investors looked to other, more compelling places to invest.
Gold dropped to about US$1,375 an ounce late on Thursday, marking a more than 2% fall over a five‑day losing streak. The move pushed prices to two‑year lows and represented the second sharp drop in gold in a month.
The fall in gold sparked a sell‑off in local mining stocks: gold producers made up seven of the top 10 losers on the benchmark ASX200 index during the sell‑off, reflecting how sensitive Australia’s mining sector is to gold prices.
The article highlights Newcrest Mining, whose shares fell 5.3% to finish at $15.02, and Evolution Mining, which recorded a sharp 11.23% fall to close at 83¢ during the sell‑off.
Analysts had mixed but cautious views: Morgan Stanley’s Joel Crane said fundamentals remain broadly good but investors are finding more compelling opportunities elsewhere amid growth uncertainty and stronger supply. FC Stone’s Edward Meir expected gold to keep softening and possibly test old lows over the summer. ABC Bullion’s Jordan Eliseo described the market as being in a “corrective phase.”
Copper fell to its lowest level in nearly two weeks on soft data from the US, Europe and China, while iron ore dropped to about US$126.40 a tonne for the year. Those moves indicate broader weakness across commodities, reflecting demand concerns that can affect commodity‑linked stocks and export revenues.
The article notes the rally in the US dollar has weighed on precious metals sentiment. ABC Bullion’s Jordan Eliseo pointed out the inverse correlation between the dollar and gold — when the dollar strengthens, gold often falls.
The key takeaways from the article are that the sell‑off was driven by weak global economic data, a stronger US dollar and short‑term investor shifts. Analysts say fundamentals in commodities aren’t necessarily broken, but volatility and a corrective phase are possible. For personal investing decisions, the article underscores the importance of understanding your risk tolerance, watching market signals, and considering analyst views rather than reacting solely to short‑term price moves.
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