The Fed’s decision yesterday to not launch a third round of quantitative easing (QE3) combined with weak economic data in China and the U.S. to send the broader financial markets substantially lower. In late afternoon trading, the markets accelerated to the downside amid reports that Moody’s was set to downgrade many of the world’s largest banks.
While the Dow Jones Industrial Average (DJIA) tumbled 250.82 points, or 2.0%, to 12,573.57 and the S&P 500 Index fell 2.2% to 1,325.51, gold and silver equities fared considerably worse.
The Philadelphia Gold & Silver Index (XAU) – a composite of the world’s largest precious metals companies – plunged 5.5% to 157.04. In doing so, the XAU suffered its worst day since a 7.8% decline on September 22, 2011. Furthermore, the XAU extended its year-to-date loss to 13.1%.
Among the large-cap gold miners, two of the worst performers today were Harmony Gold (HMY) and Randgold Resources (GOLD) – which dropped by 6.4% to $9.81 and by 5.7% to $88.91 per share, respectively.
Hecla Mining (HL) and Silver Standard Resources (SSRI) – two widely-held silver stocks – plummeted by 7.2% to $4.51 and by 8.3% to $11.92 per share.
As for the metals themselves, COMEX gold for August delivery settled down by $50.30, or 3.1%, at $1,565.50 per ounce. Silver futures – per the COMEX July contract – finished with a loss of $1.55, or 5.5%, at $26.84 per ounce.