Fresnillo plunged to the foot of the FTSE 100 on Wednesday as a sudden retreat in gold and silver prices wiped billions off London-listed miners, even as banking and aerospace names kept the wider index narrowly positive.
Shares in the Mexican-focused producer closed down 13.8 percent, their steepest one-day fall since 2022, after spot gold slid more than four percent from Monday’s record territory. Peer Endeavour Mining, also listed in London, dropped 9.4 percent. The sector’s precious-metal miners sub-index lost 10.6 percent, more than erasing its year-to-date outperformance.
Session drivers
Traders pointed to a cocktail of stronger-than-expected US dollar moves and profit-taking after gold’s long rally, rather than a single macro shock. For UK investors, the pain was concentrated in listings that had become crowded longs among commodity hedge funds domiciled in Mayfair and Geneva.
Offsetting the slide, HSBC rose 1.7 percent after the bank named former NatWest retail chief David Lindberg to run its UK ring-fenced business from January. The appointment is read as a signal HSBC intends to defend mortgage and savings share rather than shrink the domestic footprint.
Melrose Industries added 5.1 percent after GE Aerospace lifted full-year profit guidance for the second time this year, boosting sentiment toward GKN Aerospace, which Melrose owns. The industrial complex has been a quiet winner for pension funds that rotated out of miners in September.
Macro backdrop
The session unfolded hours after the Office for National Statistics reported public sector borrowing of £20.2 billion in September, keeping pressure on Chancellor Rachel Reeves ahead of next month’s Budget. Sterling barely moved against the euro, suggesting gilt markets had already priced a difficult fiscal path.
Money markets still imply only gradual Bank of England rate cuts, which normally supports banks’ net interest margins but can hurt gold when real yields rise. That linkage explained why miners fell while the FTSE 100 banks sub-index climbed 1.1 percent.
Trading desk read
Flow data from one prime broker showed UK long-only funds trimming precious-metal exposure into the close, while macro hedge funds added short gold futures in London hours. Volumes on Fresnillo were three times the 90-day average, indicating forced selling rather than a slow drift.
Analysts at a mid-tier broker said dividend cover at Fresnillo remains solid if gold averages above $2,300 an ounce through 2027, but near-term estimates will be cut after this week’s price action. For passive investors tracking the FTSE 100, the miner slump is a reminder that commodity beta still matters even in a services-heavy UK economy.