The Mining Stock Report

Major North American stock markets were down on Friday, as fear of an imminent global recession spooked investors. The TSX was down slightly, as the price of oil declined almost $4 per barrel, while gold and gold stocks benefited from investor uncertainty.

The Dow Jones Industrial average (DJIA) was down 312 points to close off Friday’s session at 8,379. The NASDAQ Composite was down 52 points to close out the day at 1,552. The fear of a global recession was believed to be causing investors to sell off their equity positions and cover margin calls.

In Canada, the S&P/TSX index was off only slightly, down 37 points to finish off the week at 9,294. The TSX is heavily weighty towards commodities stocks such as copper, nickel and oil. Commodities prices have recently dropped due to inflationary concerns and reduced demand.

Gold and gold stocks were up as investors sought safety from chaotic markets. Gold was up on $13.20, to close out the day at $734.30 per ounce (NY Spot Price). Major gold miners were also up: Barrick (NYSE:ABX) was up 5.7% or $1.08 on the day to finish at $1,989; Agnico-Eagle (NYSE:AEM) was up 9.5% or $2.26 closing at $26.00; Goldcorp (NYSE:GG) was up 10.5% or $1.62 closing at $17.00; Newmont (NYSE:NEM) was up 2.2% or $0.52, closing at $23.82; and Randgold Resources (NASD:GOLD) was up 9.8% or $2.30, closing at $25.75.

Oil dropped by $3.69 to $64.15 a barrel, despite a recent OPEC announcement to cut supplies. The expected recession has investors concerned that oil will suffer weak demand. OPEC leaders met in Vienna in an emergency meeting, and announced a cut of 1.5 million barrels a day (about 5% of current levels) to global oil supply. The announced reduction in supply is to take effect on November 1.