Newcrest Mining Limited (ASX: NCM) is just one of Australia's gold-mining stocks rocketing higher today following a sharp lift in the price of gold overnight.
According to the Fairfax press, the spot gold price rose 1.3% to US$1,124.03 an ounce, as investors sought safety from the market's volatility. Indeed, China's recent bout of currency devaluation has sent a shockwave throughout the global economy and foreign exchange market bolstering demand for the shiny metal.
Producers of the resource also benefited handsomely with Newcrest, which is Australia's largest gold miner, rising 3.6%, while EVOLUTION FPO (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) gained 4.4% and 1.2%, respectively. Going one better was Beadell Resources Ltd (ASX: BDR) which became the market's top-performing stock, rising 14.3% for the day.
Despite today's lift however, the gold sector remains an unattractive prospect for long-term investors. While a lower price and heightened economic activity could spur a wave of interest in gold, predicting future movements in the price is impossible to do with any accuracy and investors would be just as likely to get burned as they would rewarded.
Indeed, the resource's price is hovering near a multi-year low with many experts forecasting further falls. Fresh data from the World Gold Council also showed that demand for the metal fell 12% to a six-year low of 914.9 tonnes during the second-quarter of the year (largely due to a fall in demand from the world's two top consumers, India and China), solidifying that expectation.
With plenty of other great buying opportunities presenting themselves, investors would be wise to focus their attention elsewhere.