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FTSE falls, with IAG warning hitting travel shares but gold miners rising

Discussion in 'Market News' started by Lily, May 4, 2016.

  1. Lily

    Lily Forum Member

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    Precious metals companies in demand as investors seek havens

    With leading shares heading lower, investors are seeking the usual havens, giving a boost to precious metals.

    Gold and silver have both moved higher, with the dollar weakening, and helping Mexican miner Fresnillo to the top of the FTSE 100, up 13p at £11.08, while Randgold Resources has risen 60p to £65.85.

    We see the proposed deal as a positive catalyst for the stock, as it reduces leverage and builds credibility of managment’s plan.

    [But the] next divestments may be more challenging...We believe it will be challenging to sell nickel, iron ore and coal assets at attractive prices in the current environment, albeit the recent recovery in prices (met-coal, iron ore), pick up in diamond sales, and improvement in credit markets reduces the risk and allows Anglo to be selective (from a timing and asset perspective).

    As a result IAG has moderated its short term capacity growth plans.

    We’re seeing some notable losses in early London trade as disappointing sessions in the US and Asia have combined with generally lacklustre earnings and a downbeat UK consumer confidence reading, leaving at least some investors looking for a way out.

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