March 14, 2012 / 2:43 PM / 6 years ago

Gold miners slide on weakness in gold price

TORONTO, March 14 (Reuters) - Shares of North American gold miners fell on Wednesday, a day after the U.S. Federal Reserve offered few clues to further monetary easing, prompting a further slide in the price of the precious metal.

Quantitative easing, or sovereign debt repurchases by the U.S. central bank, have helped keep interest rates and borrowing costs low, making gold more attractive compared with yield- or dividend-bearing assets such as bonds or stocks.

The ultra-low interest rate environment has so far been positive for the price of gold as, despite its lack of yield, investors have viewed it as a safe bet given lackluster returns from other asset classes.

However, the Fed’s modest upgrade in its economic outlook gave the U.S. dollar a boost and prompted investors to seek opportunities in other markets such as stocks.

The rosier view on the broader U.S. economy dragged gold futures to their lowest levels since mid-January and also led to a selloff in shares of gold miners.

Spot gold was down 1.6 percent at $1,648.86 an ounce by 10 a.m. EDT, having tumbled as far as $1,639.49 - its lowest level since Jan. 16.

Shares of the world’s top gold miner, Barrick Gold, fell 3.2 percent to C$43.50 on the Toronto Stock Exchange, while those of its smaller rivals Goldcorp and Kinross Gold fell 3.4 percent and 2.6 percent, respectively.

Shares of the world’s No. 2 producer, Newmont Mining , fell 1.5 percent to $54.05 on the New York Stock Exchange. (Reporting by Euan Rocha; editing by Rob Wilson)

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