Golds bleed and bleed

Gold stocks were absolutely slaughtered today as gold prices nosedived US$11 to the US$312-per-oz. range between 11 am and noon New York time.

Today’s culprit seems to be the sudden rise in the U.S. dollar — despite yet another day of vicious, broad panic selling in North American markets and more revelations of corporate malfeasance, this time at America’s two largest banks, Citigroup and J.P. Morgan, who are being accused of helping Enron quietly transform loans into cash flow.

Among the larger companies, Barrick Gold dove 9.4% to $22.85, Placer Dome retreated 9% to $14.18, Anglogold plummeted 13% to US$22.23, Gold Fields was crushed 12% to US$9.98, Newmont Mining retreated 2% to US$40.04 and Kinross Gold lost 13% to hit $2.73.

Among the ‘big five’ base metal giants: Rio Tinto dropped 2.8% to US$66.60; Phelps Dodge retreated 3.4% to US$32; Anglo American fell 4.7% to US$14.30; Alcoa declined 4% to US$23.80; and BHP Billiton slipped 2.7% to US$10.31.

In Canada, Alcan was hammered 5.7% to $41.41, Inco fell 4.7% to $26.40, Noranda slumped 5.7% to $15.40, and Teck Cominco was walloped 14%, falling to just $10.25.

In the U.S., the S&P 500 index sank another 2.7% to 797.71 points, the Dow Jones Industrial Average dropped 1.1% to 7,702.34 points and the Nasdaq composite fell 4.2% to 1,229.05 points.

The Canadian markets kept following the U.S. lead, with the TSX composite index tracking down a painful 3.2% to 6,161.08 points.

Canada’s junior exchange spent the day in bear territory with gold bullion. The S&P TSX Venture Exchange composite index plunged 41.34 points, or 3.8%, to 1047.15 on 30.4 million shares.

American Bonanza Gold Mining closed down a penny to 16 with 1.2 million shares traded. The company has signed a letter of intent with Mask Resources whereby Mask may acquire up to 49% of American Bonanza’s wholly-owned Gold Bar and Pamlico projects, both located in Nevada. Mask must make a cash payment of $100,000 and issue 800,000 Mask shares and fund exploration expenditures of $3,600,000 over a three-year period.

Pan Asia Mining remained flat at 4 with 1.1 million shares traded. The company is exploring for diamond deposits in the 703 Exploration license area and reports that it has narrowed the search down to four significant magnetic anomalies. The targets have been dubbed Songjiazhuang, Xizoquanzhung, Beishangzi and Shiquo. The company reports that all of the necessary permits for carrying out further detailed exploration have been received.

Kensington Resources tacked on 9 and closed at $1.28 on 400,000 shares. The company reports the recovery of three macrodiamonds from the 141 kimberlite body in the Fort la Corne diamond project, in Saskatchewan. A macrodiamond weighing 3.35 carats was recovered from the upper part of drill hole 141-20 during final diamond recovery from previously unexamined clay-rich samples. The 3.35 carat stone is the largest diamond recovered to date on the project and appears to be of similar quality to diamonds recovered from pipe #141. The two other stones weighed in at 0.28 carats (from drill hole 141-28) and 0.125 carats (from drill hole 141-23).

Diagem International Resource lost 3 and closed at 20 on 301,000 shares. The company recently closed a private placement financing worth $1.5 million. A total of 6,000,000 units were sold at a revised price of $0.25 per unit. Each unit consists of one common share and one warrant exercisable for two years at the price of $0.35 per share.