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Stocks dip as commodity prices soften

Spot gold and platinum fell by about 2%

South African stocks fell on Thursday dragged down by commodity firms such as Impala Platinum and AngloGold Ashanti which tracked softer commodity prices.

Spot gold and platinum fell by about 2% after better-than-forecast US jobs data boosted the dollar, reviving expectations the Federal Reserve could raise interest rates soon.

Platinum producer Impala Platinum fell 4% and Africa’s biggest bullion producer AngloGold lost 1.8%.

The blue chips Top-40 index fell 0.21% to 48,195 and the broader All-Share index slipped 0.19% to 54,440. The indices rose more than 4% this month, its biggest monthly climb since February 2014.

The monthly gain was spurred by resources such as Kumba Iron Ore, which jumped about 25% over the last week, and Anglo American, which gained about 8% over the same period.

But analysts say the commodity rally is not sustainable as the fundamentals of the resources such as iron ore, gold and oil have not changed.

“Commodities prices take a long time to turn trends,” David Shapiro, a trader from Sasfin Holdings adding that supply from iron ore and oil would need to slow down before a turnaround could be visible in the prices.

Kumba fell 3.2% to 160 rand and Johannesburg-listed shares of Anglo American declined 3.9% to 199 rand.

Trade was active, with 201 million shares changing hands compared to last year’s daily average of 183 million shares.

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