ASX gold stocks crushed as gleaming metal loses its lustre

The ASX’s gold stocks were hammered on Thursday, after the gold price hit a three-week low.

Spot gold fell 1.1% to US$1,317.96 an ounce overnight, but had fallen as low as US$1,310.56 an ounce – the lowest price since June 28.

It’s should come as no surprise then that gold stocks have been hammered – particularly with the outlook looking increasingly cloudy. These 10 stocks were smashed down today, and more falls could be on the way.

Company Fall
Kingsrose Mining Limited (ASX: KRM) -10.0%
Doray Minerals Limited (ASX: DRM) -9.2%
Saracen Mineral Holdings Limited (ASX: SAR) -9.0%
St Barbara Ltd (ASX: SBM) -8.9%
Northern Star Resources Ltd (ASX: NST) -7.9%
Ramelius Resources Limited (ASX: RMS) -6.4%
Silver Lake Resources Limited (ASX: SLR) -6.4%
Teranga Gold Corp (CDI) (ASX: TGZ) -6.3%
AngloGold Ashanti Limited (CHESS) (ASX: AGG) -6.3%
Troy Resources Ltd (ASX: TRY) -6.3%
Perseus Mining Limited (ASX: PRU) -6.1%

Source: Google Finance

The problem is that equity markets are soaring, which is not a good sign for gold. Investors are piling into stocks and out of low-yielding or no return assets like bonds and gold.

Some market commentators are forecasting a gold price of around US$1,100 an ounce and even lower than the 2015 low of US$1,046 an ounce.

Whilst that is certainly bad news for the gold miners – most will still be generating plenty of cash thanks to the Australian dollar exchange rate versus the US dollar. The Australian dollar is currently buying 74.9 US cents – which puts the gold price at A$1,749 an ounce.

Most ASX-listed gold miners have all in cash costs of under A$1,100 an ounce.

Foolish takeaway

After enjoying a stellar run up earlier this year, gold miners and their shareholders could see their share prices reverse course and eliminate much of the gains so far this year.

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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.

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.

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