Australian Equities Slip as Gold and Mining Stocks Take a Nosedive
In a stark downturn, the gold index plummeted by a staggering 3.6%, marking its lowest point in half a year, driven by a stronger dollar and the surge in US Treasury yields, which pulled bullion below the $1,800-per-ounce mark.
Wednesday saw Australian shares close on a somber note as heavyweight miners and gold stocks faltered amidst a backdrop of dwindling commodity prices, while a surge in domestic COVID-19 cases further fueled investor apprehension.
The S&P/ASX 200 index wrapped up the day with a 0.2% dip at 7,512 points, witnessing most sectors dipping into the red, a stark contrast to its flat closure the day prior.
The gold index bore the brunt of the downturn, plunging by as much as 3.6%, hitting its lowest point in six months due to a resilient dollar and the climb in US Treasury yields, forcing bullion below the $1,800-per-ounce threshold.
Leading the losses on the gold index was Red5 Ltd, with an 8.9% slide, closely followed by Northern Star Resources and Newcrest Mining, shedding 5.1% and 2.8%, respectively.
Meanwhile, miners took a 1% hit, extending their losses for the third consecutive session on the heels of sagging iron ore and copper prices.
The tech index wasn’t spared either, recording a 0.9% decline, with heavyweight Afterpay bearing a 2% slump.
However, financials bucked the trend, managing to eke out a 0.6% gain, with Macquarie Group stealing the limelight by surging as much as 6.8% to reach a historic high after signaling a profit that surpassed expectations for the first half.
Adding to the prevailing gloom was the surge in COVID-19 cases in New South Wales, as authorities grapple with containing the Delta variant outbreak amid an accelerated vaccination campaign.
Investors are still grappling with the ramifications of Tuesday’s decision by the central bank to adhere to its plans of scaling back its weekly bond purchases.
“The central bank anticipates a resurgence in economic growth come the December quarter, fueled by the uptick in vaccinations. However, the resurgence of virus cases in highly vaccinated countries like Israel underscores the uncertainty looming over the horizon,” remarked Kunal Sawhney, CEO of Kalkine Group, in a statement.
New Zealand’s benchmark S&P/NZX 50 index mirrored the subdued sentiment, closing 1% lower at 13,193.01, with real estate stocks bearing the brunt of the downturn.