Oil prices dropped sharply again on Friday morning in volatile markets after Thursday's record sell-off, with investors keeping a wary eye on key US jobs data out later in the day.
The share prices of gold and silver mining companies moved lower, led by declines in Barrick Gold (ABX) and Goldcorp (GG), which sank 2% and 1%, respectively. Barrick, the worlds’ largest gold producer has dropped 7.5% over the past eight trading days on the back of soft gold prices and a takeover bid for copper company, Equinox Minerals that has been ill-received by the market.
US crude futures fell by more than $5 to as low as $94.63 a barrel. Brent crude was also down sharply, losing $4.89, or 4.45%, to $105.87 a barrel following a record $12 drop on Thursday. Oil prices have now fallen for five days in a row.
Burbank, founder of hedge fund Passport Capital, reduced the size of his gold positions in order to lock in profits, according to an individual close to the firm. However, the source noted that Burbank remains bullish on the gold price over the longer-term, but feels that the price of gold is due for a meaningful correction at this time.
Silver looks headed for its steepest decline in decades on the back of the decision by the CME [derivatives market] to sharply increase its cash margin requirements," said Jane Foley at Rabobank. "The losses in oil have been linked with the expectation that the war against terror may be gaining the upper hand, though this view has been met with much scepticism."
The dollar traded slightly down against a basket of currencies after jumping 1.5% on Thursday, the biggest gain in over six months.
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