What: Amongst the biggest falls in the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) yesterday were gold producers Resolute Mining Limited (ASX: RSG), Beadell Resources Ltd (ASX: BDR), Northern Star Resources Ltd (ASX: NST) and Newcrest Mining Limited (ASX: NCM).
So what: The gold price has been trading around the US$1,300 per ounce level, however recent falls have taken the precious metal down to US$1,260 per ounce. The most likely explanation for the price drop is a combination of US equity markets rallying to record highs – which implies optimism for the US economy's outlook – coupled with a benign outlook for global macro issues now that the Ukraine-Russian stand-off appears to have eased.
Now what: With the price of gold at a three-month low and many analysts suggesting a long-term floor at US$1,200 per ounce has been established, it could be reasonable to expect that the worst of the falls for gold stocks is over. With Newcrest and Beadell both down close to 15% over the past three months, these two stocks would appear to be relatively more attractive and could be worth a closer look by gold bugs.
