Sector movers: Precious metal miners fall as gold sinks after FOMC

Heavy falls in the prices of gold and silver saw precious metal miners drop on Thursday after the Federal Reserve lifted its outlook for interest rates.

While the Federal Open Market Committee on Wednesday maintained its pledge to keep short-term interest rates near zero for a "considerable time" after quantitative easing ends, policymakers lifted their interest-rate projections for 2015 and 2016 slightly.

The move sent the US dollar to a six-year high against the yen and was on track to reach its highest close in four years, according to the Bloomberg Dollar Spot Index which tracks it against 10 major currencies.

Dollar-denominated gold often moves inversely to the price of the greenback as the commodity becomes more costly for holders of other currencies.

"Gold has taken another dive [...] after the US Fed increased its interest rate projections, spurring USD gains which made the safe haven more expensive," explained Mike van Dulken from Accendo Markets.

As such, bullion was trading at an eight-month low on Thursday, falling as low as $1,216.60 an ounce - its lowest since 6 January. As of 14:12, futures for December delivery in New York were down 1.2% at $1,221 an ounce.

The price of silver dropped 1.8% to $18.40 an ounce, its lowest since June 2013.

Mali-focused gold miner Randgold Resources and Mexican gold and silver producer Fresnillo were among the worst performers on the FTSE 100 in afternoon trade. Polymetal, Centamin and African Barrick Gold were also unwanted on the FTSE 250.

Not even the news of another surprise stimulus measure in China was enough to give the miners a lift, despite the country being the world's top consumer of metals.

The People's Bank of China had cut the 14-day 'repo' rate - one of the short-term financing channels for banks - as Beijing continues to attempt to avert a slowdown in the world's second-largest economy. The central bank on Wednesday injected $81bn into China's five-largest banks to boost liquidity.

Platinum prices were also firmly lower on Thursday, down 0.5% at $1,346.63 an ounce, sending shares in Lonmin, Aquarius Platinum, Jubilee Platinum and Sylvania Platinum into the red.

Top performing sectors so far today
Industrial Metals & Mining 1,507.89 +1.98%
Mobile Telecommunications 4,592.92 +1.38%
Fixed Line Telecommunications 4,494.30 +1.17%
General Industrials 4,153.25 +1.15%
Automobiles & Parts 8,042.95 +1.12%

Bottom performing sectors so far today
Mining 16,754.67 -0.49%
Personal Goods 24,279.80 -0.44%
Beverages 14,373.22 -0.24%
Gas, Water & Multiutilities 6,082.68 -0.16%
Electronic & Electrical Equipment 3,703.25 -0.15%