MENU

Gold stocks soar as chances of US rate rise sink

Australian gold stocks have soared, after yet another set of weak US economic data was released overnight.

A report showed that US service industries expanded at the slowest pace in six years saw the probability of the US Federal Reserve raising rates this month sink to 24%. That’s despite chair Janet Yellen announcing last week that the case for raising rates had ‘strengthened’, and weaker than expected manufacturing data.

Several analysts and market commentators suggest that as much as the US Fed wants to start lifting rates, it can’t really do that unless there’s economic data that shows the economy is strong enough to support it.

If and when the US does finally start lifting interest rates, that will be bad news for gold and gold stocks. But until the music stops, gold shares will keep on dancing.

Here are today’s early moves.

Company Last Price Market Cap ($m) Gain
West African Resources Ltd (ASX: WAF) $0.36 $172.4 18.0%
OceanaGold Corporation (ASX: OGC) $4.98 $93.6 11.4%
Saracen Mineral Holdings Limited (ASX: SAR) $1.50 $1,205.3 10.7%
Beadell Resources Ltd (ASX: BDR) $0.41 $433.6 6.5%
Gold Road Resources Ltd (ASX: GOR) $0.66 $573.5 8.2%
Alacer Gold Corp – CDI (ASX: AQG) $3.44 $237.0 8.2%
Cardinal Resources Ltd (ASX: CDV) $0.56 $166.6 8.7%
Ramelius Resources Limited (ASX: RMS) $0.51 $267.9 7.4%
Northern Star Resources Ltd (ASX: NST) $4.44 $2,666.4 6.2%
Perseus Mining Limited (ASX: PRU) $0.54 $548.0 5.9%
EVOLUTION FPO (ASX: EVN) $2.51 $3,860.0 5.9%
Resolute Mining Limited (ASX: RSG) $2.10 $1,383.7 3.5%
Dacian Gold Ltd (ASX: DCN) $3.81 $508.4 4.5%
Newcrest Mining Limited (ASX: NCM) $23.35 $17,898.0 3.3%

Source: Google Finance

The spot gold price gained 2% overnight to US$1,353.40 a tonne. At the current exchange rate of US 76.7 cents, Australian gold miners are receiving around A$1,764 an ounce. With all-in sustaining costs of between A$1,000 and A$1,100 an ounce, they are making huge margins.

No wonder the market is pushing the shares higher.

Here's what happened to The Motley Fool's massive $1 million ASX bet...

Less than three years ago, Motley Fool boss Bruce Jackson bet $1,000,000 of company money (plus $500,000 of his own family's cash) on one unique service known as Motley Fool Pro. Now Pro is up a staggering 89%, darn near DOUBLING members' money! Simply click the link below to get a sneak peek at Pro's 3 biggest winners... the "golden egg" stocks that have powered Pro to 89% returns! Fair warning: Your special time-limited invitation won't wait.

Discover the 3 "golden egg" stocks - and your invitation!

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.