Fool's Gold Report: Metals Mostly Lower As Fed Offers No Surprises; Newmont, Barrick Fall 2%

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Federal Reserve often moves markets with its announcement, but today's release of its latest meeting minute led to a relatively muted response. Without any real surprises in the thinking behind the decision to begin reducing its bond-buying activity, precious-metals investors continued to look at the longer-term implications of higher interest rates on investor demand. Spot gold fell another $6 to $1,226, sending SPDR Gold Shares down 0.6%. Silver fell more sharply, with iShares Silver Trust declining 1.5% as silver's $0.32 drop took it down to $19.52 per ounce. Palladium fell $5 to $735 per ounce, while platinum, the sole gainer among precious metals today, gained $1 to $1,414 per ounce.

Data on the economic front arguably detracted from gold's appeal, with a report indicating that the private sector created 238,000 jobs in December showing that the U.S. economy is starting to fire on all cylinders. If the Labor Department's report Friday backs up the private-sector reading, then one key determinant of the Fed's stimulus could disappear sooner than expected, putting further pressure on gold and precious metals.

The pessimism among metals investors was clearer in looking at mining stocks, where the Market Vectors Gold Miners ETF fell 1.6%. Newmont Mining and Barrick Gold each posted losses of around 2%, perhaps in reaction to a downgrade for 2014 gold prices from Moody's Investors Service. Moody's now expects average gold prices of $1,100 in 2014, down from $1,200, and it also cut its silver price target 10% to $18 per ounce. Newmont and Barrick actually have relatively low costs of production compared to some of their smaller peers, giving them greater ability to weather a long-term drop in prices. Yet gold has fallen far enough that further declines will still have a marked impact on their profitability, and after big share-price losses last year, many investors in Newmont and Barrick won't be patient enough to wait out the bad times in hopes of an eventual rebound.

All that glitters is not gold
Gold's best days might be past for now, but record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, The Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

The article Fool's Gold Report: Metals Mostly Lower As Fed Offers No Surprises; Newmont, Barrick Fall 2% originally appeared on

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading