Shares in gold miners fall after the yellow metal drops below $1,300

 
Courtney Goldsmith
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Gold miners' shares were hit by the steep drop in gold prices (Source: Getty)

Shares in gold miners were dragged down today after the yellow metal lost its shine following the US Federal Reserve's decision last night to begin unwinding its massive balance sheet.

The Fed will be the first central bank to start the unwinding process, gradually reducing the $4.5 trillion pile of securities gathered during the quantitative easing stimulus programme by stopping the reinvestment of the money from maturing bonds.

The US dollar rallied to a two-month high against the Japanese yen on the hawkish news, pushing gold to hit a three-week low.

Read more: Gold recovers after dipping to a two-week low ahead of the Fed's meeting

"Gold is trading sharply lower, below $1,300 for the first time in September, as the Fed’s monetary policy update sees investors flee from the non-yielding asset. The resultant stronger US dollar puts a further dent into sentiment, increasing the relative price of the precious metal," said analysts at Accendo Markets.

Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: "The negative breakout suggests a bearish reversal on the two-month positive trend and could encourage a further slide toward $1,288."

London-listed gold miners were hit by the steep drop in gold prices with Fresnillo, Antofagasta and Randgold Resources leading the FTSE 100 fallers this morning.

Fresnillo's shares fell 2.5 per cent to 1,406.5p, Antofagasta's dipped 2.33 per cent to 921.5p and Randgold's fell 2.28 per cent to 7,302.5p.

The yellow metal, a safe haven asset, made gains over the past couple of months as geopolitical tensions ramped up on North Korea's missile tests.

Read more: Donald Trump says the US could "totally destroy" North Korea

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