Gold producers across Asia slumped after the precious metal fell the most in two years, with Newcrest Mining Ltd. leading declines on the region’s benchmark stock measure.
Newcrest tumbled 10 percent at the close in Sydney, losing almost $750 million in market value and posting the steepest drop on the MSCI Asia Pacific Index. Fellow Australian miners also sank, with Evolution Mining Ltd declining 15 percent and Northern Star Resources Ltd. falling 9.6 percent. In Hong Kong, Zijin Mining Group Co. and Zhaojin Mining Industry Co. slid at least 4.3 percent.
Bullion for immediate delivery tumbled as much as 4.2 percent Monday to $1,086.18 an ounce, the lowest price since March 2010, before paring its drop. Gold has fallen from favor with investors as Federal Reserve Chair Janet Yellen prepares to raise U.S. interest rates this year, boosting the greenback. While China updated its bullion reserves on Friday for the first time since 2009, the increase was smaller than some expected.
“It’s a combination of factors: softer Chinese gold demand, the rising U.S. dollar and what we’ve seen this morning being compounded by the triggering of a number of stop losses,” said Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne. “All of that put into the mix, when people are very nervous, creates the environment and the price action we’re seeing today.”