It has been a disappointing day for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). The benchmark index has dropped sharply, with only the gold miners making any notable gains. This is largely down to yet another jump in the gold price.
Overnight the gold price continued its recent ascent and climbed to a high of US$1,373 per ounce, this time as a result of European banking shares and oil prices sinking once again.
This was great news for Australian gold miners today and has been reflected in their share prices. A few stand out performers posting strong gains today include St Barbara Ltd (ASX: SBM), Beadell Resources Ltd (ASX: BDR), Newcrest Mining Limited (ASX: NCM), and Northern Star Resources Ltd (ASX: NST).
But can this run continue?
The gold price has been on a tear in recent days after US second quarter GDP growth came in far below expectations at just 1.2%. This has many doubting the US Federal Reserve will be in a position to justify raising interest rates at all this year.
Although I am neither bullish or bearish on the price of gold, I do believe there are a number of potential catalysts to take the safe-haven asset higher.
According to Bloomberg if Donald Trump is elected president it could send the gold price rocketing higher, with some economists believing it could rise by as much as 40%.
In addition to this, I believe the rising tensions in the South China Sea could also bring fear to the markets and drive up the price of safe-haven assets like gold and silver.
But ultimately only time will tell. If gold remains at these levels through until 2017 then I would expect Australia's gold miners to report bumper profits once again. So if you are bullish on gold then a small position in one of the gold miners may not be a bad addition to your portfolio.
