Dow Jones rises and S&P 500 falls, March 24-28

Comments from Chinese Premier Li Keqiang that China would likely invest in infrastructure to bolster economic growth while the U.S. shows a strengthening economy — with consumer spending rising 0.3% in February after a 0.2% gain in January — put downward pressure on precious metals and lifted base metals.

Gold fell below its 200-day moving average, closing the trading week at US$1,294.90 per oz. in a 3% drop, while silver fell below US$20 per oz. to US$19.81 per oz.  Prices for copper and iron ore, by contrast, rose 3% and 1.5%. The Philadelphia Gold & Silver Index lost 5.23% to finish the week at 93.36. The Dow Jones Industrial Average inched up 0.13% to 16,323.06, while the S&P 500 Index fell 0.48% to 1,857.62.

Tension over Russia’s annexation of Crimea and sanction threats kept the pressure on Kinross Gold, making it the week’s second most actively traded stock and sending its shares down US52¢ to US$4.21 apiece. The company launched commercial production at Dvoinoye, a high-grade, low-cost underground mine in Russia’s Chukotka region in October 2013. Dvoinoye is the fourth mine the company has operated in Russia, and Kinross says it’s the company’s lowest-cost jurisdiction and a core operating region. Dvoinoye is 100 km north of Kinross’ Kupol mine, and at peak production is expected to produce 1,000 tonnes of ore per day, which will be moved to the mill at Kupol via an all-season road.

The correction in gold and silver prices hit many precious metal mining companies. Goldcorp dropped US$1.52 to US$25.11 per share, Agnico Eagle Mines lost US$1.33 to US$31.29 and Barrick Gold fell US$1.09 to US$18.30 per share, all on no company-related news. Silver producers like Hecla Mining — the largest and one of the lowest-cost U.S. silver producers — dropped US35¢ to US$3.11 per share, while Avino Silver & Gold Mines, which describes itself as one of the industry’s purest silver producers, dropped 20% to US$1.56 per share.

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