US markets fall, March 19-23

Gold rose 2.5% to close at US$1,346.8 during a poor week for U.S. markets. The Philadelphia Gold and Silver Index rose 3.5% to 81.5, the Dow Jones Industrial Average fell 5.7% to 23,533.2 and the S&P 500 Index fell 5.9% to 2,588.26.

United States Steel dropped US$6.02 to US$33.94. The stock lost 15.1%, highlighted by an 11% drop on Thursday. The stock has slid all month, down from a peak US$46.01 on March 1.

U.S. President Donald Trump’s 25% tariff on steel imports went into effect last Friday, with exemptions granted to Argentina, Australia, Brazil, Canada, Mexico, South Korea and Europe, according to U.S. Trade Representative Robert Lighthizer.

Earlier this month, Bank of America Merrill Lynch lowered its U.S. Steel rating from “buy” to “neutral,” citing concerns of a global trade war. Timna Tanners, an analyst from the bank, noted the tariff would likely have little benefit in 2018 due to tonnage already contracted at a lower price, but could result in “threats of trade retaliation” by 2019.

Shares of Gold Fields rose 9.9% to US$4.10. Earlier this month the company announced it was transitioning from owner mining to contract mining at its Tarkwa gold mine. Gold Fields says it will continue to manage exploration and processing. Tarkwa has mineral reserves of 6.1 million oz. gold at a stable year-on-year grade of 1.24 grams gold per tonne. Gold Fields expects mine life will extend until 2031.

In January the company sold its polymetallic Arctic platinum project in northern Finland to a Finnish subsidiary of private equity fund CD Capital Natural Resources Fund III. Gold Fields will get US$40 million cash and keep a 2% net smelter return royalty on all metals.

Shares of Newmont Mining rose US$1.37 to US$38.76. The company reported a GAAP net income loss of US$60 million for the year, compared to a US$220-million loss the year before, owing to higher gold production and gold prices. The company, however, lowered its net debt to US$0.8 billion, and ended the year with US$3.3 billion in cash.

The company also announced in February that it had gold reserves of 68.5 million ounces — the same as the end of 2016. The company says that “additions and revisions fully replaced depletion,” adding it was able to increase its resources to 48.2 million oz. gold.


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