STOCK MARKETS — Golds suffer least in sliding market — Asian demand concerns sink base metal issues

The Toronto Stock Exchange composite index fell back 326.67 points during the period Jan. 7-13, closing at 6,329.59. The decline, which included a whopping 220-point drop on Jan. 9, was blamed on further nervousness over failing Asian economies and the pressure it may put on commodity prices.

The base metals, which plummeted 8%, and the banks and conglomerates — both of which had a disastrous day on Jan. 9 — led the market lower, but declines were the norm in all economic sectors. The golds continued a wild ride, falling almost 10% over the first four trading days but getting over 8% back on Jan. 13 to settle only 1% lower. Trading volumes were moderate through the whole period.

The Canadian dollar, which was trading at US69.71 cents at noon on Jan. 14, also had a wild week. A notion that the Bank of Canada might shortly tighten interest rates gave the Loony a boost on Jan. 9, but that rally collapsed, and the dollar bottomed again on Jan. 13. Most of the other major foreign currencies picked up at least a little ground on the Loony this week, though they all continue to lose ground against the greenback.

Gold bullion was a little stronger, which contributed to the rally in the gold stocks on Jan. 13. The yellow metal was fixed at US$285.90 per oz. in the London morning session on Jan. 14, up $3.80 from a week earlier. The price didn’t hold up, however, and gold gave back another US$3.40 by afternoon.

The real news was in the white metals. Silver’s resurgence was cut off, as the price fell 40 cents to US$5.70, but the platinum group went on a tear as supply worries surfaced again. Palladium was the unquestioned star, fixed at US$248.50, up US$46.50 from Jan. 7. Platinum was up $20.50 over the same period, finishing at US$378.50 per oz., and rhodium prices rocketed to US$420 per oz.

The TSE gold and precious minerals index closed at 5,802.58, down 61.49 points. Barrick Gold, the volume leader, was unchanged at $24.20, while rival Placer Dome was up 25 cents at $16.70. TVX Gold, down 45 cents at $3.75, and Kinross Gold, down 20 cents at $4.30, didn’t share in the joy over gold’s modest recovery, nor did Teck, whose B-series shares declined 85 cents to close at $20.

The base metals were mixed over the trading period, although nickel’s woes continued as the metal lost 5 cents to close at US$2.53 per lb. in the London Metal Exchange ring on Jan. 14. Copper was up 1 cents at US76 cents per lb., and zinc headed up 2 cents, reaching US$50 cents per lb.

The TSE metals and minerals sub-group was singled out for punishment, dropping 313.51 points over the five trading days and closing at 3,788.58.

Both Westmin Resources and suitor Boliden were lower, with Westmin losing 20 cents to close at Boliden’s bid price of $5.40, and Boliden falling $1.25 to $2. Misery was widespread among the big integrated metal producers. Inco fell $2.85 to $21.90, Noranda was down $2.10 to $22.30, Falconbridge shed $1.60 to $16.30, and Cominco lost 85 cents, closing at $20.75. The mining group also lost ground, with Cameco down $3.25 at $40.25, Inmet off 85 cents at $4.55, and Rio Algom $1.35 lower at $21.75. Among the smaller issues on the index, Aur Resources lost 50 cents to close at $3.

Among the junior Toronto issues, American Mineral Fields was heavily traded and bounced from $1.20 on Jan. 6 to $1.80 on Jan. 13, with a high of $2 and a low of $1.15 on the way. The company’s tender for the Kolwezi copper-cobalt tailings project in the Democratic Republic of Congo’s Katanga province has ostensibly been cancelled by the state mining agency. AMF later announced it had filed suit against South African mining house Anglo American, alleging the mining house had interfered with its contract with the Congolese.