Shares of Wheaton Precious Metals (TSX:WPM), Agnico Eagle Mines (TSX:AEM) and Barrick Mining (TSX:ABX) fell sharply on Friday, October 30, as the price of gold dropped to a one-year low.

The three heavyweights dragged the materials sector to the bottom of the S&P/TSX Composite on the index's worst day since June. None of them issued market-moving news on Friday, and the selling tracked bullion.

What happened

Wheaton, a streaming company that buys future metal output from miners, slid by close to a twentieth of its value. Agnico Eagle and Barrick each lost more than a twenty-fifth, the same report said.

Gold fell sharply to a one-year low, with the slide weighing on metal miners. December gold futures settled near US$3,889 an ounce.

Materials was the weakest sector on the index, falling nearly a twentieth on the day. The S&P/TSX Composite closed at 35,620.03, down about 629 points, its steepest daily drop since June 5 and its lowest close since October 14. Decliners beat advancers 661 to 339.

Why it matters

These three stocks are among the largest companies on the index, so their moves carry real weight for Canadian investors and index funds. When gold drops, their profits are expected to drop with it.

Agnico Eagle released its third-quarter results after the close on Wednesday, October 28, and held its conference call on Thursday. The company said it was on track to meet its 2026 production and cost guidance, backed by strong free cash flow.

Agnico produced about 814,000 ounces of gold in the quarter and earned adjusted Net Income of US$2.62 per share. It realized an average gold price of about US$4,264 an ounce. That is well above where gold traded on Friday, which shows how much the price backdrop has shifted since the quarter ended.

Wheaton and Barrick have not yet reported. Wheaton plans to release its third-quarter results after the market closes on Thursday, November 5, with a call the next morning. Barrick will report before the market opens on Monday, November 9.

The bigger picture

Friday's slide in gold came as investors grew more nervous about the global economy and interest rates. The Bank of Canada raised its policy rate on Wednesday for the first time in about three years, and markets expect more hikes by January. Higher rates make non-yielding Assets like gold less attractive.

The broader market also had other worries. Technology stocks fell on concerns about artificial intelligence spending after weak results from Intel and Amazon, and data showed Canada's economy stalled in August.

Not everything fell. Oil rose above US$100 a barrel after a tanker attack in the Strait of Hormuz, lifting energy stocks and making energy one of only two sectors to finish higher.

What to watch next

The gold price is the key variable. If bullion steadies, the selling in large producers could ease. A further drop would put pressure on fourth-quarter margins, since producers' costs do not fall as quickly as the metal price. Streamers like Wheaton pay a largely fixed price per ounce, so their margins are steadier, but their Revenue still moves with gold.

Wheaton's results on November 5 and Barrick's on November 9 will give investors fresh numbers on costs, output and cash flow. Investors will also be listening for any changes to guidance.

Comments from the Bank of Canada and the U.S. Federal Reserve on future rate moves could also drive gold in the weeks ahead.