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NEW YORK (AP) â¿¿ Shares of almost every major gold miner and other companies in the sector hit new annual lows before recovering Friday as a plunge in gold prices leveled off.
Gold prices plunged 7 percent this week to levels not seen since September 2010. On Friday, after declining sharply the day before, gold for August delivery rose $5.80 to finish at $1,292 per ounce.
The driver behind the decline can be found in statements from the U.S. Federal Reserve, which said Thursday that it may begin winding down its massive bond-buying program this year.
The yields on bonds rocketed and pulled a lot of money out of the gold market with investors trying to take advantage. It also sent the dollar sharply higher against foreign currencies. Commodities bought and sold in dollars grow more expensive for investors holding foreign currencies when the U.S. currency rises.
Despite Friday's stable performance, gold prices might not be out of the woods yet.
UBS cited the Fed action in lowering its forecast of gold prices one and three months from now and cutting earnings forecasts for the miners for 2013, 2014 and 2015.
"This creates an increasingly difficult environment for gold with higher yields and a stronger dollar perpetuating weak sentiment," said UBS analyst Brian MacArthur.
Hitting new lows Friday were Barrick, Goldcorp, Newmont, AngloGold Ashanti, Gold Fields, Royal Gold, Gold Star and Vista Gold.
Shares bounced back later in the day, however.
Shares of Freeport-McMoRan Copper & Gold Inc. rose 44 cents to close at $28.16; Newmont Mining Corp. gained 30 cents to $30.05; Barrick Gold Corp. gained 29 cents to $16.89; Goldcorp Inc. rose 63 percent, or 2.6 percent, to $24.58; and NovaGold Resources Inc., which hit a new annual low Thursday, gained 3 cents to $2.12.