Gold majors lead ASX declines as China halts gold purchases
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The news: Gold stocks led declines on the ASX as reports of a Chinese pause on gold purchases saw global prices extend last week's fall.
The numbers: Eight of the 10 worst performers across the ASX 200 were gold producers, as materials slumped 2.5% to lead sector losses by 2:40pm AEST.
West African Resources (-8.8%), Emerald Resources (-8.6%), Genesis Minerals (-7.7%), Regis Resources (-7%), Ramelius Resources (-7%), Capricorn Metals (-6.9%), Evolution Mining (-6.2%) and Perseus Mining (-5.6%) all recorded heavy sell-offs.
Spot gold prices were down 0.39% to USD2,301.78 ($3488.62) an ounce, having tumbled 3.5% to USD2,290 on Friday.
The context: Gold prices were driven down last week after reports suggesting that China's central bank paused all gold purchases in May. China's central bank had previously increased its gold reserves for 18 consecutive months.
Meanwhile, strong US employment data and a rising US dollar also weighed on gold prices. Investors are also waiting on latest US CPI figures on Wednesday and the Fed's latest monetary policy decision on Thursday.
The source: Bloomberg
