Stocks hold up in face of depressing news

The S&P/ASX 200 slid

25 points in morning trading but by the close had whittled that back to a loss of

2.9 points, to 4190.5.

A warning from Reserve Bank deputy governor Ric Battellino that the economy would suffer some spill-over effects from Europe's debt crisis would not have added to investor confidence.

It came on top of news that the Melbourne Institute-Westpac Consumer Confidence survey had found a 20 per cent slide in confidence this month.

"The boost to the consumer mood from the November rate cut was relatively temporary," said ANZ senior economist Katie Dean.

"Households are becoming more concerned about the troubles in Europe and what this means for employment prospects. You can't ignore this result, but it's not necessarily a sign that the economy is about to weaken significantly, given business confidence is holding up quite well."

A swag of goldminers lost ground after Dennis Gartman, a US-based economist who foresaw the 2008 commodities slump, warned that the metal could fall to as low as $US1475 an ounce more than $US400 below its record high of $US1921.15 reached on September 6.

"The weak Indian rupee could make it more expensive for the world's biggest consumer of gold to buy the precious metal," Mr Gartman said.

"Since the early autumn here in the northern hemisphere gold has failed to make a new high. Each high has been progressively lower than the previous high, and now we've confirmation that the new interim low is lower than the previous low.

"We have the beginnings of a real bear market, and the death of a bull."

Gold dropped sharply in late US trading yesterday morning. It picked up slightly in Australia but at the close the spot price was down $US12.80 an ounce at $US1639.83. That took its fall this week to $US70.42 an ounce.

Newcrest Mining lost 37? (1.2 per cent) to $31.84, Kingsgate dropped 31?

(4.7 per cent) to $6.29, and OZ Minerals dipped 4?

(0.4 per cent) to $10.68. But Medusa Mining rose 6?, or 1.2 per cent, to $4.93.

Other miners and bank stocks were mixed. Rio Tinto was up 40? at $63.16 but BHP Billiton lost 12? to $35.70. ANZ closed 23? higher at $20.97 while Westpac lost 3? to $20.80.

The dollar finished at $US1.0016 from $US1.0083 on Tuesday.