Australia’s gold miners have continued their rampant run today despite the general pullback in share prices across the broader market.

While the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) itself is down 0.4%, gold producers EVOLUTION FPO (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) are up 1.9% and 2% at $2.16 and $4.29, respectively.

Meanwhile, Newcrest Mining Limited (ASX: NCM) and Silver Lake Resources Limited. (ASX: SLR) have gained 2.3% and 6%, Regis Resources Limited (ASX: RRL) is up 2% and St Barbara Ltd (ASX: SBM) shares are up 1.3%.

The chart below shows the returns from this group since the beginning of the year:

Source: Google Finance

Source: Google Finance

As can be seen, the gains across the sector are not limited to today. Instead, many of the gold miners have produced outstanding returns over the last four months or so, including Silver Lake Resources’ 147% gain, which has been driven mostly by the surging gold price.

Up from a multi-year low of US$1,050 an ounce in December, the shiny metal is now knocking on the door of US$1,300 an ounce after experiencing its strongest quarterly surge in more than three decades. This headline from Bloomberg, followed by the quote “absolutely no one saw this coming”, says it all:

Even Bulls Get Stampeded by Gold’s Best Quarter in Three Decades” – Bloomberg, March 2016.

The charge has largely been driven by the weaker US dollar, which itself has been reflected in Australia’s climbing dollar. While most economists expected the US Federal Reserve to hike interest rates around four times in 2016, expectations have diminished since then which has had a negative impact on the US greenback.

As gold is quoted in terms of US dollars, the weaker US dollar is a positive for international buyers in that gold becomes cheaper to purchase.

However, it’s likely that fear and uncertainty have also had an impact on the price of gold (and thus, the share prices of the companies mentioned above). Although share markets around the world have largely recovered from the sharp dive earlier in the year, many remain uncertain about the health of the global economy which could be driving prices up.

That is good for gold investors in the short-term, but if that level of fear and uncertainty subsides – which it almost certainly will, over time – gold prices could begin falling again, dragging on the gold miners as well.

I won’t even profess to know where gold prices will be next week, next month, or even next year. Indeed, consistently forecasting metal prices is impossible to do with accuracy, and that is one thing you need to consider before you even think about investing in the gold sector.

Besides, there are plenty of other great investing opportunities outside the sector which arguably possess greater prospects for long-term investors.

Indeed, when renowned dividend investing pros like Andrew Page issue buy alerts, it pays to listen. Because investors who followed Andrew's recommendation of Australian Pharmaceuticals in early 2015 could've doubled their money in just over a year, turning $15,000 into over $30,000 by the time he recommended they sell and lock in their profits. Chances are you won't want to miss uncovering the names of Andrew's newest share recommendation and short list of 3 dividend Best Buys Now Shares.
So click here to learn more about these potentially life-changing shares.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.