Fresnillo PLC (LSE:FRES) and Endeavour Mining led the FTSE 100 fallers on Monday afternoon, as a sharp sell-off in gold hammered shares across the precious metals sector.
Both stocks dropped in response to a 3% fall in the gold price, triggered by a surprise breakthrough in trade talks between the United States and China.
The two countries agreed to suspend the bulk of their tariffs for 90 days, with China slashing levies on US goods from 125% to 10% and the US reducing its own from 145% to 30%.
The deal spurred a wave of risk-on sentiment, prompting investors to retreat from safe-haven assets, including gold, and pile into equities and oil.
Gold fell to around $3,210 per ounce, extending a retreat from its April record high of $3,500.
Analysts said a further drop below $3,200 could accelerate the sell-off, wiping out gains from the past two months.
Meanwhile, US Treasury yields climbed and oil gained over 2% on hopes of stronger trade-driven demand.
Chinese equities rallied, and US stock futures pointed to strong opening gains, particularly in the tech sector. Investors appear to be reassessing inflation risks and growth prospects in light of the tariff truce.
Fresnillo shares, up 57% year to date, lost some of their lustre to trade down 4% as did Endeavour's.