Gold slumps to 3-year low, dragging TSX with it

Large sell-offs of gold stocks and telecom companies pushed the Toronto Stock Exchange lower Wednesday, as bullion prices dropped to their lowest level in almost three years.
Gold prices fell to their lowest level in almost three years on Wednesday. (Dhiraj Singh/Bloomberg)

Large sell-offs of gold stocks and telecom companies pushed the Toronto Stock Exchange lower Wednesday, as bullion prices dropped to their lowest level in almost three years.

Gold lost $49.50 US to $1,225.60 an ounce in New York. It had earlier been as low as $1,221, it's lowest level in 34 months. Gloom over last week's news that the Federal Reserve may soon slow its $85 billion a month worth of stimulus spending has taken the wind of out the sails of gold prices, sparking a multi-day sell-off.

The TSX's gold sector was off by more than six per cent. Barrick Gold, the world's largest gold miner, fell $1.38 to $15.50 Cdn a share.

So far this year, gold stocks have lost 46 per cent of their value on the TSX.

TSX down more than 50 points

The TSX as a whole on Wednesday rebounded in the afternoon but ended the trading day down 53.51 points to 11,951.90.

Another drag on the stock market came from telecoms, as investors reacted to a report that U.S. wireless giant Verizon has offered to buy Canadian upstart Wind Mobile, giving it a toehold in the Canadian market and presenting a possible major threat to the three main incumbents, Rogers, Bell and Telus.

Telus shares lost eight per cent, ending the trading day at $30.70 while Rogers stock fared even worse — down more than nine per cent to $41.67. Bell stock lost four per cent, closing at $41.57.

Bell Aliant and Manitoba Telecom shares were also slightly lower.

The Canadian dollar was up 0.27 of a cent to 95.43 cents US as the U.S. dollar weakened.