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Randgold Resources, Lonmin and Fresnillo slide as gold, silver and platinum retreat

Published: 21:46 24 Aug 2010 AEST

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Despite a sell-off in global stock markets, gold declined today as investors were opting for other safe haven assets, particularity the US dollar.

Gold rallied over the past two weeks amid weak economic updates that were coming out in the US, spurring concerns over the pace of the economic recovery. The possibility of a double dip recession became more realistic after US non-farm payrolls fell by more than expected and jobless claims hit nine month highs. Manufacturing updates failed to inspire optimism with last week’s update on the Philly fed index revealing a drop from 5.1 to -7.7 last month. Yesterday’s Chicago Fed national activity index was at 0 compared to -0.7 in June, however, the three month moving average declined.

The macroeconomic data due to be released today includes US existing home sales and the Richmond Fed index.

In the wake of a strong performance of the past few week that saw gold climb close to all time highs of US$1,265/oz, bullion has been viewed as overbought and traders have been pouring money into other assets to hedge risks. The demand for the American currency has been high with US dollar Index, which measures the greenback’s strength against a basket of six other major currencies, adding a further 0.5% today to extends its winning streak to four sessions.

Gold slid to US$1,217/oz, while silver and platinum declined to US$17.88/oz and US$1,494/oz respectively.

Major mining stocks were in decline today with the sole exception of African Barrick Gold (LON:ABG), which tacked on nearly 1%. Peers Randgold Resources (LON:RRS) and midcap Petropavlovsk (LON:POG) lost 1.5% and 3.4% respectively.

Specialty chemicals firm Johnson Matthey (LON:JMAT) shed less than 1%.

FTSE 250 constituents Aquarius Platinum (LON:AQP) and silver producer Hochschild Mining (LON:HOC) declined 2.1% and 1.6%.

Diversified mining investment company Marcator Gold (LON:MCR) emerged among the top performers in the sector with an 11% surge.

West Africa operating diamond production and development company Stellar Diamonds (LON:STEL) was in the red with a 9.5% loss.

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