US stocks drop, Nov. 6-12

Lower prices for gold, copper and oil (benchmark Brent crude dipped below US$45 per barrel for the first time since August), weighed on U.S. resource equities, while better labour market data pointed to the economy’s improving fundamentals, and raised expectations the U.S. Federal Reserve would raise interest rates in December. The Labor Department reported that initial weekly claims for unemployment benefits (276,000) were unchanged, and have stayed below the 300,000 threshold for the last 36 weeks, while job openings in September increased 149,000 to 5.53 million. Last month, the U.S. unemployment rate fell to a 7.5-year low of 5%. William Dudley, president of the New York Federal Reserve, said he sees “the risks right now of moving too quickly versus moving too slowly [on an interest rate hike] as nearly balanced.” The Dow Jones Industrial Average dropped 2.3% to 17,448.07, and the S&P 500 Index fell 2.6% to 2045.91. The Philadelphia Gold & Silver Index plunged 6.2% to 45.23, while the gold spot price in New York slid 1.6% to US$1,085.80 per oz. 

Barrick Gold shares rose 19¢ to US$7.55 apeice on the back of agreements to sell non-core assets in Nevada for US$720 million in cash. The sales include 100% of its Bald Mountain and Ruby Hill mines, its 50% stake in the Round Mountain mine and its 70% interest in the Spring Valley project. The latest agreements bring Barrick’s total asset sales this year to US$3.2 billion, and the company says it is on track to meet its 2015 target of cutting debt by US$3 billion. 

An oxide gold zone discovery near its Dark Star deposit in Nevada drove up Gold Standard Ventures shares by 32.1% to US58¢. The junior reported that a drill hole 515 metres north of Dark Star’s maiden resource returned a 157-metre intercept of 1.51 grams gold. The drill hole was 60 metres east and 10 metres north of a drill hole reported the week before that intersected a vertical gold zone, including an upper oxidized, 149-metre intercept of 1.38 grams gold per tonne.

With copper prices hitting a six-year low, Freeport-McMoRan, one of the world’s largest copper producers, felt the heat. A Nov. 11 research note by Goldman Sachs did nothing to allay concerns about the metal, predicting instead that copper prices could fall even more by year-end, and stay low through 2018. Freeport lost US$2.71 per share to finish at US$8.77, on no company-related news.