Canada Stocks Fall, Led by Gold Producers as Metal Prices Drop

Canadian stocks fell, led by gold producers as the metal dropped to its lowest level since August after U.S. economic growth beat forecasts.

Yamana Gold Inc. and Goldcorp Inc. dropped at least 2.1 percent. Silver Wheaton Corp. of Vancouver declined 1.4 percent as the price of the metal retreated the most in almost six months. Bombardier Inc. rose 3.1 percent, the most in almost three weeks, after the aircraft maker announced its second sale agreement for the CSeries jet in two days.

The S&P/TSX fell 14.92 points, or 0.1 percent, to 12,388.71 in Toronto. The equity gauge has gained 3.6 percent this year.

“Gold the commodity has been very weak and it’s broken down here,” said John Kinsey, a fund manager with Caldwell Securities Ltd. in Toronto. His firm manages about C$1 billion ($1.01 billion). “That’s put the kibosh on gold stocks.”

The U.S. economy grew at a 3.1 percent annual rate in the third quarter, more than previously reported, and exceeding the median estimate of economists in a Bloomberg Survey, which called for a 2.8 percent advance.

Basic-materials companies contributed most to losses in the S&P/TSX as four of 10 industry groups retreated. Trading volume was 4.4 percent higher than the 30-day average.

Gold Miners

Gold for February delivery dropped 1.3 percent to settle at $1,645.90 an ounce in New York, the lowest since August. The S&P/TSX Gold subindex dropped 1.5 percent as 28 of 32 members declined. Gold mining companies account for 8.8 percent of the S&P/TSX weighting, according to data compiled by Bloomberg.

Yamana, based in Toronto, fell 2.4 percent to C$16.39 and Vancouver-based Goldcorp declined 2.1 percent to C$35.17. Barrick Gold Corp. lost 0.7 percent to C$33.22. Toronto-based Barrick and Goldcorp are the world’s largest producers of the metal. Yamana is Canada’s fourth-biggest.

Silver Wheaton slipped to C$34.39 and Silvercorp Metals Inc. of Vancouver declined 2.5 percent to C$5.02. Silver for March delivery slumped 4.6 percent to $29.678 an ounce in New York, the biggest loss since June.

Capstone Mining Corp. sank 7.3 percent to C$2.30 after the Vancouver-based copper miner issued 2013 production guidance yesterday of 85 million pounds of copper, plus or minus 5 percent, less than the forecast by PI Financial Corp.

“The contracted output is due to much lower-than-expected output at the Minto mine,” due to lower copper grades, said Aleem Ladak, mining analyst in Vancouver at PI Financial, in a note to clients today.

Bombardier gained to C$3.68 after saying that AirBaltic agreed to buy 10 CS300 airliners in a deal with a value of $764 million that may rise to $1.57 billion if purchase rights are exercised. The Montreal-based company said yesterday an unnamed carrier signed a letter of intent to buy 12 of the smaller CS100 models, which have a list value of about $870 million, with options to buy 18 more jets.

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