Sector movers: Gold decline sends precious metal stocks lower

Precious metal, along with banking and airline stocks pushed the London market lower on Friday.

As metal prices stayed in a state of general decline, the FTSE 100 ended 0.54% or 34.71 points lower at 6,361.09, while the FTSE 250 was broadly flat at 17117.21. Gold futures continued in negative territory for yet another session, in the wake of the US Federal Reserve maintaining interest rates unchanged at 0.25%, in line with market expectations, but leaving the door open to an increase in December.

The move continues to dent confidence in the precious metals market. COMEX gold futures contract was down 0.64% or $7.40 at $1,139.90 an ounce, while spot gold was 0.36% or $4.18 lower at $1,141.79 an ounce extending the previous session's losses.

COMEX silver fell 0.13% or four cents to $15.53 an ounce, while spot platinum was 0.35% or $3.52 lower at $988.18 an ounce. Meanwhile, base metals futures continued lower in late afternoon European trading as well.

Past the midway point of the session, primary aluminium (up 0.5%) was the only London Metal Exchange three-month delivery contract in positive territory. Nickel (down 3.4%), copper (down 0.8%), lead (down 0.8%), tin (down 1.8%), and zinc (down 0.3%) were all trading lower.

Blue chips Anglo American (up 1.79%) and Glencore (up 1.53%) coped with the volatility, as did Petra Diamonds (up 3.54%) and Evraz (up 4.63%).

However, a direct connection with the precious metals market saw Randgold Resources (down 1.82%) among the FTSE 100’s biggest fallers for yet another session. Midcap Acacia Mining (down 3.50%) endured an equally troubling afternoon.

Banking sector stocks also ended the week on a sour note. Barclays (down 2.21%) was on the back foot again after posting disappointing third-quarter results in the previous session.

Royal Bank of Scotland declined after reporting a drop in pre-tax profit in the third quarter to £295m from £3.2bn the previous year due to higher restructuring costs.

Elsewhere, British Airways owner International Consolidated Airlines (down 2.51%) flew lower despite reporting a jump in third quarter profit. Societe Generale said a negative share price reaction was likely given the strong performance of the stock, which is up 22% year-to-date.