JOHANNESBURG (Reuters) - South Africa's mining sector fell more than 3 percent on Thursday, as mining stocks continued to take a battering despite steady metal prices.

"It's a snowballing thing. Once people start selling and they start taking profits, it's almost like a self-fulfilling prophecy. People jump on the back of it," Tubby Goodwin, a trader at Investec Securities said.

The mining sector was 2 percent lower at 44,700.40 points at 0837 GMT, while the broad All-Share index was down 1.95 percent at 28,732.04 points.

"They've (miners) been absolutely obliterated. Yesterday we saw them come off sharply," Andrew Todd, a trader at BoE Private Clients said.

"There's a rumour that there was a big hedge fund in the U.K. that had redemptions in that fund which resulted in forced selling into the market."

Blue-chip heavyweight miner BHP Billiton slid for a third consecutive day, down 2.3 percent to 269.35 rand, while the platinum index dived over 4 percent, led by the world's second-biggest platinum producer Impala Platinum, which was trading 6.1 percent lower at 279 rand.

Anglo American shed 1.3 percent to 510.14 rand and diversified mining group Exxaro fell 5.6 percent to 126.55 rand.

However, the gold mining sector bucked the trend, climbing 0.5 percent on a strong gold price, which was hovering near its highest level in more than two months. The world's fourth-biggest gold producer, Gold Fields, was the top gainer among blue-chips, rising 1 percent to 99.01 rand.