In the past five trading days, shares of Australia's largest gold miners have soared higher.
Far outperforming the S&P/ASX200's (ASX: XJO) (Index: ^AXJO) 2.72% return over the past five days, the S&P/ASX All Ords Gold (ASX: XGD) (Index: ^AXGD) index has been on a blistering run, jumping an impressive 7.2%.
All Ords Gold vs ASX200
Source: Google Finance
Both the Australian sharemarket and the gold price have been buoyed by dovish commentary at the U.S Federal Reserve's monetary policy meeting held last week.
For gold investors, rising U.S interest rates are perhaps the biggest threat to the shiny metal's current price of $US1,183 per ounce. Gold is believed to be a natural hedge against inflation and uncertainty, but higher U.S interest rates will imply an improving economic outlook.
Since Wednesday last week, the gold price has rallied 3%.
As I noted last fortnight, a number of Australian gold miners are currently benefitting from the well documented fall in the Australian dollar (which is also likely to depreciate if/when U.S. rates rise) and a resilient gold price.
Indeed, Australian-listed Brazilian gold miner, Beadell Resources Ltd (ASX: BDR) has risen 12.5% since March 11.
Australia's two largest publicly-listed gold miners, Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST), have risen 13% and 8%, respectively.
Have you missed this golden opportunity?
Forecasting future gold prices is fraught with problems. Indeed any prediction will invariably be proven wrong sooner rather than later.
Given its status as a commodity product, coupled with the fact we have no way of knowing where the spot price will head, its imperative investors focus only on the lowest-cost gold producers with proven reserves and high grades.
