Investors are in buy mode today with the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) soaring 1.4% to be just 40 points below the 5,500 level.
While all sectors are enjoying gains the gold sector has been the standout performer. Beadell Resources Ltd (ASX: BDR), Sirius Resources N.L. (ASX: SIR), Medusa Mining Limited (ASX: MML), Northern Star Resources Ltd (ASX: NST) and Resolute Mining Limited (ASX: RSG) have all gained over 4%.
Meanwhile Newcrest Mining Limited (ASX: NCM) shares are up 2.5% and trading at $10.40 today. It's an unbelievable turnaround for the gold mining giant. In just six months the stock has gained over 40% after touching a decade low of $6.96 in early January.
The bounce in gold mining stocks comes despite surprisingly little action in the gold price. In early afternoon trade gold was buying US$1,277.50 per ounce. Rather the rally amongst gold miners would appear to be in response to the US Federal Reserve's reassurances overnight that interest rates will remain low in response to a downgrade in US economic growth forecasts.
If you want exposure to the gold sector then more than ever you need to focus on the lowest cost producers as these miners are the only ones that still have a chance to make a profit despite the paltry low gold price.
