Glistening: Gold price hits new highs

Low-cost producers to shine

The gold in your rings and bracelets is more valuable than you thought. The price of gold has risen to near six-month highs, and is currently trading around US$1,735 an ounce.

Market expectations of further stimulus measures in both Europe and the US have seen the price of gold rise further. US policymakers are expected to announce as early as Thursday that they may take steps to keep interest rates low.

Since the US Federal Reserve first used quantitative easing as a means to encourage growth in 2008, the price of gold has more than doubled, hitting a record high of US$1,920 an ounce in September 2011. With the US dollar weakening and investors trying to avoid troubled European currencies, central banks have been aggressive buyers of gold.

Hong Kong’s July gold shipments to China nearly doubled from a year ago, while gold exports over the first seven months of this year have already exceeded the total volumes for 2011. India is the top gold consuming nation, but looks like it will be rapidly overtaken by China.

In the past few weeks the US Republican Party has even called for a commission to look at returning to the gold standard for the first time in 30 years, as a way of setting a fixed price for the US dollar against the gold price to improve monetary stability. Its unlikely to happen, but should it go ahead, based on the supply of gold held by the US government and US monetary supply, it would likely mean the price of gold would surge to more than US$10,000 an ounce, and the US dollar’s credibility could vanish.

So what is the outlook for the gold?

While the major global economies are struggling to grow, and Europe seems mired in its debt issues, its likely that the price of gold will remain around the current prices. If the US decides to stimulate its economy, then gold is likely to rise.

For low cost Australian gold miners, now’s their chance to shine. Kingsrose Mining (ASX: KRM) recently reported its cash cost of producing gold at an amazing US$254 an ounce, while Medusa Mining Limited (ASX: MML), Troy Resources (ASX: TRY) and Northern Star Resouces (ASX: NST), all make more than US$1000 an ounce after production costs. Their shareholders will be cheering the current gold price.

If you’re in the market for some high yielding ASX shares, look no further than our “Secure Your Future with 3 Rock-Solid Dividend Stocks” report. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »