Miners track metals lower; silver producer Fresnillo drops
Falls in commodity prices across the board were weighing on share prices in the mining sector on Tuesday, with Mexican silver miner Fresnillo leading the way lower after a poorly-received first-half report.
"After a decent run-up in recent weeks, blue-chip mining stocks have cooled [...] as lower metals prices take the steam out of the rally," said Matt Basi, head of UK Sales Trading at CMC Markets.
Silver Miner Fresnillo's share price was down nearly 9.5% in afternoon trade after a 27% decline in gross profit to $518.9m in the first half as revenues dropped on falling gold and silver prices during the period.
COMEX gold futures for December delivery were also lower today, down 1.5% at $1,282.90 an ounce in morning trade in New York. Prices were extending losses into the sixth straight day, its longest losing streak in 11 weeks. Meanwhile, silver for September delivery fell 1.0% to $19.525 an ounce.
Putting pressure on prices today was a strengthening dollar on the back of rising bets that the Federal Reserve will soon begin to 'taper' its quantitative easing (QE) programme, a stimulus measure which has a dilutive effect on the greenback.
The President of the Atlanta Fed, Dennis Lockhart, said today that the central bank could start tapering QE at any of the three remaining policy meetings this year (ie as early as September).
Meanwhile, Dallas Fed's Richard Fisher said yesterday that the Fed is "now closer to execution mode" after last week's fall in the unemployment rate.
FTSE 100 mining peers Randgold, Vedanta, Antofagasta, Glencore Xstrata, Anglo American and Rio Tinto were all registering moderate falls today.