Gold came under pressure from a rise in the U.S. dollar to two-month highs and a looming interest rate hike in the U.S., leading to the metal’s worst trading day of 2017 Thursday (March 2).
Gold for delivery in April, the most active contract on the Comex market in New York with over 24 million ounces traded by early afternoon, slumped to a low of $1,231.90, down 1.5% from yesterday's close.
The negative momentum saw gold stocks selling off heavily on the day with the Market Vectors Gold Miners ETF, holding stock in the world's top gold miners, dipping 4%, while the Philadelphia Gold & Silver Index fell at a similar pace, nearly wiping out its year-to-date gains.
While the metal is still up some 7% in value this year, the shares of some major gold miners are back in negative territory for 2014.
Vancouver’s Eldorado Gold Corp (TSX:ELD) was among the hardest hit, along with Canadian miners Yamana Gold (TSX:YRI) and Iamgold Corp (NYSE:IAG). All three lost more than 6% in value on the day, pushing the stocks into negative territory for the year.
Goldcorp (TSX:G) declined a shade under 4% March 2, but the company is sporting double-digit year-to-date gains. The Vancouver-based company is in the process of rebuilding its portfolio after a steep drop in production last year of 17% or nearly 600,000 ounces.
Toronto-based Barrick Gold Corp (TSX:ABX) lost 4.6% with 32 million shares changing hands, making the world's number one producer of the metal the sixth most active stock on the NYSE.
Barrick is now worth $21.5 billion in New York, still up a healthy 14% so far this year. Barrick shares struck 21-year lows in July 2013 after peaking at a $54 billion market value two years before when gold was peaking above $1,900 an ounce.
The miner last year produced 5.5m ounces of gold, a 9% dip compared with 2015, after selling its interest in Bald Mountain and Round Mountain mines to Kinross and reducing its stake in the Porgera mine in Papua New Guinea. Aggressive cost cutting saw all-in sustaining costs for the company fall 12% to $730 in 2016.
Newmont Mining Corp (NYSE:NEM) came off fairly lightly on the day losing 2.4%, but the decline saw the company close below its opening levels for the year. Denver-based Newmont grew output 6% last year to 4.9m ounces on the back of additional production from its Merian and Long Canyon mines.
Newmont is on a growth spurt and production in 2017 could top 5m ounces for the first time and should range between 4.5 and 5.4 million ounces over the next five years according to the company. All-in costs at the company portfolio of mines are inching down more slowly and averaged more than $900 an ounce in 2016.
The world's third largest gold producer behind Newmont, AngloGold Ashanti (NYSE:AU) dropped 4.9% in Thursday trade, and the company's ADRs worth $4.3 billion in New York is now barely in the black so far in 2017.
Johannesburg-based Anglogold reported an 8% decrease in annual production to 3.6m ounces in 2016. Production was impacted by safety-related stoppages at its South African mines and lower grades at the giant Kibali operation in the Congo its owns together with Randgold Resources.
Toronto's Kinross Gold (TSX:K)(NYSE:KGC), the world's number five gold producer with 2.8 million ounces last year, lost 4.8% on the day and is now worth $4.1 billion on the NYSE.
Newcrest Mining Limited was one of the biggest losers with a 5.7% drop affording the Australian miner a market cap of $13 billion. Newcrest produced close to 2.5m ounces last year and boasts the lowest cost mining operation in the world. Cadia Valley can dig out the yellow metal for less than $300 an ounce all-in thanks to healthy copper and silver credits at the massive operation in West Australia.
South African miner Gold Fields (NYSE:GFI) declined 3.8% in New York, but the Johannesburg-based firm which last year kept annual production steady at 2.1 million ounces is still showing gains in 2017 for a market worth of $2.5 billion.
Russia's Polyus Gold at just shy of 2 million ounces per year the world's eight largest gold miner, escaped most of the carnage, trading down only slightly in Moscow where it's worth close to RUB1 trillion or the equivalent of nearly $17 billion. Polyus is the world's lowest cost major gold producer, producing gold for less than half today's ruling price on an all-in cost basis.
Agnico-Eagle (NYSE:AEM) produced 1.7m ounces in 2016 and is on an ounce for ounce basis one of the most expensive gold mining stocks with a market value of $9.1 billion on the NYSE. The counter dropped 3.8% on Thursday wiping out its gains so far this year.
Sibanye Gold (NYSE:SBGL) declined 4.6% in New York, but the year to date the Johannesburg-based firm is still trading 9.2% for the better. Sibanye produced 1.5m ounces last year placing it in the top 10 gold producers and the company is also expanding its platinum group metals operations with a $2 billion deal to buy Stillwater Mining, the only PGM producer in the US.
Further down the production rankings, Randgold Resources ADRs trading on the Nasdaq contained losses below 3% on the day and is the best performing large gold miner year to date with a 17% gain in value and a market cap of $8.4 billion.
The fast-growing company with five mines and advanced projects in West and Central Africa is estimated to have produced some 1.3 million ounces last year.