South African gold and platinum mining shares fell to the lowest in more than two years after gold entered a so-called bear market as bets that Greece may quit the euro eroded the metal’s appeal as a haven.
The FTSE/JSE Africa Gold Mining Index slid as much as 3 percent to the lowest since February 2010. The FTSE/JSE Platinum Mining Index dropped as much as 3.5 percent to its worst since June 2009. AngloGold Ashanti Ltd., Africa’s biggest producer of the metal, retreated 2.4 percent by 11:24 a.m. in Johannesburg. Impala Platinum Holdings Ltd. declined 1.8 percent. Bullion for immediate delivery slipped as much as 1.1 percent to $1,526.97 an ounce, the cheapest since Dec. 29.
Concern about Greece exiting the euro boosted the dollar, making it more attractive than bullion to some investors. A second Greek vote will be held, possibly next month, as gridlock followed a May 6 ballot in which voters rejected the austerity program that underpins the country’s bailout accords. German Finance Minister Wolfgang Schaeuble called the new election a referendum on whether Greece stays in the common currency.
“Commodity prices were unrealistically high as a direct result of a combination of easy and cheap money from quantitative easing and the threat of inflation,” Peter Major, an analyst at Cadiz Corporate Solutions, a unit of Cadiz Holdings Ltd., said by phone from Cape Town. “The market is efficient and it looks ahead. Mining houses have been weak for four or five months now; investors definitely saw weaker prices going forward.”
The Dollar Index, a six-currency gauge, climbed for a 13th day, the longest winning run since its inception. The euro dropped to $1.2681, the weakest since Jan. 17.
Gold’s retreat took it 20 percent below its all-time high of $1,921.15, hit on Sept. 5. Spot gold’s so-called 14-day relative strength index dropped to 20.13, below the level of 30 that some analysts regard as signaling a rebound.
Platinum, the best-performing precious metal this year, lost 0.4 percent to $1,426.90 an ounce after dropping to $1,422.50, the lowest level since January.
© Copyright 2014 Bloomberg News. All rights reserved.