Goldminers Suffer as Gold Prices Fall, Trade Hopes Lift London's Indices

Strategic Insights -

Market hopes surrounding a US-EU trade deal and positive corporate results from Reckitt Benckiser, ITV, and Howden Joinery lifted London's indices to new record highs. Meanwhile, Endeavour Mining and Fresnillo saw selling pressure as gold prices declined, and Vesuvius shares fell due to challenging market conditions in Europe and China. Analysts at JP Morgan and Stifel offered positive views on Aberdeen Group and Cordiant Digital Infrastructure, respectively, citing recent price cuts and potential for return to inflows.

Key Takeaways:

  • Gold prices fell for a second session in a row, with spot gold down by 0.4% to $3,374.09 per ounce and US gold futures dropping by 0.6% to $3,377.90.
  • Endeavour Mining closed 30p, or 1.3%, lower at £23.08, while Fresnillo fell 30p, or 2.1%, to £14.33.
  • London's indices were lifted by hopes of the US agreeing a trade deal with the European Union, with the FTSE 100 reaching a new record high of 9,138.37.
  • Vesuvius, a molten metal engineer, said it continued to face challenging market conditions in Europe and China, although it has been accelerating cost measures to deal with the declines.
  • The company's shares fell 211/2p, or 5.5%, to 3661/2p.
  • Analysts at JP Morgan have been taking a positive view of Aberdeen Group ahead of its half-year results, citing recent price cuts as a potential catalyst for return to inflows.
  • Aberdeen's shares closed 7p, or 3.5%, higher at 2051/2p.
  • Cordiant Digital Infrastructure was given a positive review from analysts at Stifel, who noted the company's sale of a 10% stake in Datacenter United for €20 million would "free up some capital" to continue its strategy of smaller bolt-on acquisitions.
  • Cordiant's shares closed 1/2p, or 0.4%, higher at 941/2p.

Statistics:

  • Spot gold down by 0.4% to $3,374.09 per ounce
  • US gold futures down by 0.6% to $3,377.90
  • FTSE 100 index up by 0.85% to 9,138.37
  • FTSE 250 index up by 0.64% to 22,155.41
  • Vesuvius shares fell 211/2p, or 5.5%, to 3661/2p
  • Aberdeen's shares closed 7p, or 3.5%, higher at 2051/2p
  • Cordiant's shares closed 1/2p, or 0.4%, higher at 941/2p

Sources:

  • Helen Cahill writes (article title not specified)
  • Reckitt Benckiser (source not specified)
  • ITV (source not specified)
  • Howden Joinery (source not specified)
  • JP Morgan (source not specified)
  • Stifel (source not specified)