MENU

Australian gold miners plunge as gold price sinks

A 1.6% fall in the spot gold price overnight has seen the ASX-listed gold miners hammered.

Spot gold fell 1.6% to US$1,333 an ounce after peaking at US$1,370 an ounce earlier this month as the chart below indicates.

Spot gold price 13 Jul 2016

Source: Kitco.com

The fall has been blamed on stronger US economic data, particularly after US non-farm employment data for June 2016 easily beat market expectations. That could see the US Federal Reserve push ahead with its plans to raise interest rates – making bonds more attractive and gold less attractive.

In early trading, gold miners have seen their share prices sink as the following table shows.

Company Fall
Burey Gold Limited (ASX: BYR) -9.5%
Orinoco Gold Ltd (ASX: OGX) -6.9%
Troy Resources Ltd (ASX: TRY) -6.7%
Blackham Resources Ltd (ASX: BLK) -6.5%
St Barbara Ltd (ASX: SBM) -4.4%
Ramelius Resources Limited (ASX: RMS) -4.2%
Resolute Mining Limited (ASX: RSG) -4.2%
Beadell Resources Ltd (ASX: BDR) -4.0%
Regis Resources Limited (ASX: RRL) -4.0%
EVOLUTION FPO (ASX: EVN) -3.9%
Silver Lake Resources Limited. (ASX: SLR) -3.8%
Perseus Mining Limited (ASX: PRU) -3.4%
Newcrest Mining Limited (ASX: NCM) -3.2%
Northern Star Resources Ltd (ASX: NST) -3.1%
OceanaGold Corporation (ASX: OGC) -2.8%

Source: Google Finance

However, the falls may be overdone, given many Australian-based miners are making huge margins on gold priced in Australian dollars. With an exchange rate of around 76.13 US cents, that equates to a price of A$1,754 an ounce. A number of the miners listed above have all in sustaining costs of around A$1,000 an ounce, so they are making substantial margins.

Foolish takeaway

As the US economy continues to strengthen, despite woes in other parts of the world – like Europe and China – gold is likely to come under more selling pressure. That could see the gold miners hit even harder.

3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low." Simply click here to uncover these stocks. 

No credit card required - this report is FREE!

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.