2 Min Read
(Updates with analyst comment)
By Ryan Vlastelica
NEW YORK, April 15 (Reuters) - Shares of mining companies fell in early trading on Monday as the price of gold continued its recent decline, dropping to its lowest since March 2011.
Gold sank 4 percent, breaching a support level at $1,400 per ounce as weak growth data in China suggested a setback for the global economy and investors cut their exposure to commodities.
"Not only did technicals break, but sentiment did as well," said Adam Sarhan, chief executive of Sarhan Capital in New York. "We've seen a dramatic shift, almost overnight, where the old bull market in gold is now in question. It doesn't seem like a normal pullback."
The SPDR Gold Shares ETF lost 5.3 percent to $136.35. Among the most active mining stocks, Freeport-McMoRan Copper & Gold Inc fell 5.8 percent to $30.06 while Newmont Mining was off 5.3 percent to $34.45.
Newmont is now down more than 20 percent thus far in 2013, putting the stock into bear market territory. The S&P 500 is up 11 percent in 2013.
"There's a tremendously negative divergence between gold stocks and the broader market, which shows you that now isn't a good time to buy," said Sarhan. "The bears remain in control of the market."
Miners were weak around the globe, with U.S.-listed shares of Barrick Gold down 5.8 percent at $21.30 and Goldcorp Inc off 7.2 percent to $27.55 on the New York Stock Exchange.
Gold prices have tumbled recently, falling 5 percent in Friday's session. Gold is down more than 11 percent so far in April. (Editing by Nick Zieminski)