Mining co. shares battered on falling gold prices

Mining shares fall sharply as gold, silver prices plunge on Fed plans

Associated Press

Mining company shares fell sharply Thursday as the Federal Reserve's decision to reduce bond purchases drove down prices for gold and silver.

The Fed said Wednesday that it would reduce its monthly bond purchases to $75 billion from $85 billion beginning in January, citing a stronger jobs market. The Fed said it will still keep short-term interest rates very low.

This announcement boosted a general confidence in an economic recovery, but sent the price of precious metals down sharply.

Gold fell $38.40, or 3 percent, to $1,196.60 an ounce. It could be the first annual price decline for gold in more than a decade. Silver prices fell almost 4 percent.

Interest rates are rising and the dollar is gaining on the Fed's decision. But traders are selling gold because they see less risk of inflation from the Fed's stimulus program.

Gold is generally considered a "safe" investment that people often buy in uncertain times. The bond-buying program had prompted some investors to bid up gold prices out of fear that it might cause inflation. That fear never materialized.

The shares of a number of mining companies fell Thursday as their success is closely linked to the price of gold and other precious metals. Here's a look at how a number of mining companies were faring in early afternoon trading amid mixed trading in broader markets:

Barrick Gold Corp.: Down 29 cents to $16.61

Goldcorp Inc.: Down 29 cents to $20.85

Newmont Mining Corp.: Down 40 cents to $22.74

Vista Gold Corp.: Down a penny to 37 cents

Royal Gold Inc.: Down $1.11, or 2.5 percent, to $43.74

Golden Star Resources Ltd.: Down a penny to 43 cents

McEwen Mining Inc.: Down 3 cents to $1.72

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