Precious metals stocks were trading on heavy losses Monday after the Institute for Supply Management released much better than expected manufacturing data for the month of November.
Manufacturing Data Renews Fears of Taper
ISM data showed manufacturing in the US at a 2.5-year high for the month of November, which along with positive numbers out of the Eurozone and China, re-ignited investor anxiety over the possibility that a tapering of Federal Reserve stimulus-spending would be in the offing sooner than later.
Prices for and stocks tied to metals like Silver and Gold throughout 2013 have reacted in a conflicted manner to the near-constant threat of tapering. Heading to the closing bell on Monday, investors didn’t even need one hand to count the gold stocks that had made gains, with futures prices for delivery this month were down almost 2.5 percent to $1,220.50. Meanwhile, all silver stocks were down, with the nearest contracts off almost 4 percent to $19.20.
Gold and Silver Stocks Limping Along
The largest gold companies were hit the hardest, with Barrick Gold (ABX) and Yamana Gold (AUY) off over 5 percent, Newmont Mining (NEM) off over 3 percent, and Eldorado Gold Corp. (EGO) off 7.5 percent. Silver miners fared even worse, with all stocks off over 4 percent, and the biggest losses taken by Canada’s First Majestic (AG) and Endeavour Silver (EXK) .
A number of commodities began heading for bear-market territory this year, but the bifurcation between equities and precious metals has been the most dramatic. Gold and to a lesser extent silver have traditionally been seen as “safe-haven” investments for times of uncertainty, but with the continued support of the Federal Reserve’s unprecedented monetary stimulus, this status has become muddled to the point that outbreaks of “taper-talk” can actually lead to significant outflows from precious metals.
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