Asia mining stocks fell broadly after gold prices plummeted following the US President's nomination of a new Federal Reserve Chair. Zijin Mining saw its shares decline by 5.9% in Shanghai and 6.8% in Hong Kong. Shandong Gold's A-shares dropped by the 10% daily limit, while Zhaojin Gold International's H-shares fell 4%. Gold prices, after a sharp rally in recent months that pushed them above the $5,000 per ounce mark in January, experienced a significant drop last Friday. The front-month gold futures contract plunged 11% to $4,713.90 per ounce, marking its largest single-day decline since January 1980. According to data from Intercontinental Exchange (ICE), spot gold extended its decline on Monday, falling a further 4% to $4,696.97 per ounce after a 9% drop last Friday. Meanwhile, shares of Korea Zinc declined as falling silver prices dampened investor sentiment towards the world's largest zinc smelter, which also produces the precious metal as a by-product in its smelting process. The stock was last down 11% at 1,674,000 won, after having tumbled as much as 13% during Monday's morning session. In Indonesia, shares of Merdeka Copper Gold fell as much as 14.95%, while nickel miner Vale Indonesia dropped up to 13.95%. The plunge in gold prices coincided with a jump in the US dollar, following Trump's nomination of former Federal Reserve Governor Kevin Warsh to succeed Jerome Powell as Chair of the central bank. Warsh has historically been more concerned about high inflation than slowing growth, alleviating Wall Street's concerns that the Fed might yield to Trump's pressure for lower interest rates. The market has been worried that a successor hand-picked by Trump could be influenced by the President, thereby compromising the Federal Reserve's independence.
Comments