U.S. markets, Jan. 27-31

A continued sell-off in emerging market currencies, worries about slowing growth in China and the U.S. Federal Reserve’s announcement that it would trim its monthly bond purchases by US$10 billion to US$65 billion, starting in February, had equities slipping further during the week. The Dow Jones Industrial Average slid 1.14% to 15,698.85 and the S&P 500 Index dipped 0.43% to 1,782.59. Spot gold touched US$1,270 per oz. mid-week, but closed at US$1,245.90 per oz. The Philadelphia Gold and Silver Index fell 2.13% to 90.71.

Newmont Mining shares fell US$3.28, or 13.1%, to US$21.60, and the company was the week’s fourth most actively traded stock, after disappointing guidance called for a 10% decline in gold production and 7% higher cash costs in 2014. Newmont expects consolidated 2014 gold-and-copper production between 5 million and 5.3 million oz., and 160,000 and 175,000 tonnes. All-in sustaining costs are pegged at US$1,075 to US$1,175 per gold oz. and US$2.75 to US$2.95 per lb. copper. The company added that it would use a US$1,300 per oz. gold price — down from US$1,400 per oz. — for asset-impairment testing and calculating its 2013 gold reserves. Last year Newmont’s attributable production came in at 5.1 million oz. gold and 144 million lb. copper.

Asanko Gold climbed 8.3% to US$1.76 per share. Shareholders of Asanko Gold and PMI Gold overwhelmingly approved Asanko acquiring PMI. Under the deal, each PMI shareholder receives 0.21 of an Asanko share for each PMI share held. Asanko’s Esaase gold project in Ghana is targeted to begin construction before April, with production of 200,000 oz. gold per year expected by the end of 2015, while PMI’s neighbouring Obotan project is set to produce another 200,000 oz. gold per year beginning in 2017.

Agrium shares were US$2.09 lower, finishing the week at US$87.10 apiece on no news, but weak nitrogen and phosphate prices dogged the stock. Nitrogen prices are down 11% and phosphate prices are down 15% from a year ago, according to an analysis by Raymond Goldie of Salman Partners.

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