The Australian sharemarket is a sea of red today with almost every sector sitting firmly in the red, with the exception of the S&P/ASX All Ords Gold (Index: ^AXGD) (ASX: XGD), an index that tracks the nation's gold producers, which rose 2.6%.
Gold is normally seen as a hedge against inflation as it holds its value well over time, while it is also a universally recognised symbol of wealth. As a result, the shiny metal becomes something of a 'safe haven' during times of economic difficulty or uncertainty, as was the case during the Global Financial Crisis and various other times of market insecurity (many of which turned out to be nothing but false alarms).
Indeed, Greece's emphatic "No" vote to further financial support from Europe has thrown global equity and currency markets into chaos with no one quite sure what it all means, or what to expect next. The spot gold price rose 0.2% during the latest session to US$1,168.48 an ounce, and could be set for further increases in the near future.
Notably, 'could' is the key word in that sentence as there is no way of accurately forecasting a commodity's movement. Indeed, its upside could be restricted considerably if the "No" decision acts to strengthen the US currency, as a higher US currency is generally a negative for spot gold prices.
Nonetheless, Australia's gold producers have all rallied today upon expectations of a rise in the price of gold. Newcrest Mining Limited (ASX: NCM) surged 2.4%, while Northern Star Resources Ltd (ASX: NST), EVOLUTION FPO (ASX: EVN) and Beadell Resources Ltd (ASX: BDR) rose 3.8%, 6.7% and 2.8%, respectively.
While there is a chance these companies could continue to climb in price in the near-term, trying to time the market is a fool's game (lower case 'f'). With no way of knowing where gold prices will be next year or even this time next week, an investment in the sector mightn't be the greatest long-term move for 'Foolish' investors.