Whilst the majority of Australia's leading gold miners have climbed higher today, one in particular has stood out with strong gains.
With a 7% gain to $2.37, the shares of St Barbara Ltd (ASX: SBM) are the best performers on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) so far today.
There are a couple of reasons for the rise. Firstly, overnight the gold price once again rose higher to US$1,215 an ounce following Theresa May's Brexit speech and Donald Trump's comments on the strength of the U.S. dollar.
But another key reason why St Barbara's shares are outperforming fellow gold miners Resolute Mining Limited (ASX: RSG), Northern Star Resources Ltd (ASX: NST), and Newcrest Mining Limited (ASX: NCM) is the release of its second-quarter update.
During the December quarter St Barbara managed to increase its production by almost 7% to 98,982 ounces from 92,547 ounces in the previous quarter.
As well as this the miner was able to reduce its all-in sustaining costs to a lowly A$876 an ounce from A$935 an ounce.
Although the average realised gold price fell nearly 6% quarter on quarter to A$1,636 an ounce, the miner still boasts an extremely healthy margin which helped free cash flow rise A$76 million during the quarter.
In light of this strong quarter management has upgraded its full year production guidance by around 10,000 ounces and reduced its all-in sustaining cost forecast for its key Gwalia mine.
If I were confident that the gold price would remain at least at current levels for the next 12 months, I would snap up St Barbara shares in a heartbeat. The low-cost miner has some of the most efficient and profitable operations in the industry, which makes it a great option for investors.
But unfortunately I don't have a lot of confidence that the gold price will remain at current levels under a Trump presidency. Whilst the president-elect may not want a strong U.S. dollar, I don't believe he has much choice if he goes ahead with his fiscal plans.
As the currency strengthens and rates rise in the United States, I expect to see the gold price tumble sharply. For that reason I would resist the gold miners and look elsewhere in the market.
