Why the gold miners are ending the week with a BANG

Although the benchmark S&P/ASX 200 has dropped lower today, one area of the market is certainly booming.

The S&P/ASX All Ords Gold (Index: ^AXGD) (ASX: XGD) has jumped 2.8% this morning as investors pile into the gold miners again.

The Newcrest Mining Limited (ASX: NCM) share price, the Evolution Mining Ltd (ASX: EVN) share price, and the Saracen Mineral Holdings Limited (ASX: SAR) share price are amongst the biggest movers in the sector, each rising by at least 3%.

Elsewhere Resolute Mining Limited (ASX: RSG), Perseus Mining Limited (ASX: PRU), St Barbara Ltd (ASX: SBM), and Northern Star Resources Ltd (ASX: NST) have also made notably stronger-than-normal gains today.

Why have they jumped?

In the last three weeks the gold price has been on a steep decline, falling around 6.1% from the year-to-date high of US$1,295 an ounce it made in April.

But overnight the precious metal’s losing streak came to an end and it bounced off recent lows to US$1,226 an ounce as global markets retreated.

Should you invest?

Whilst I wouldn’t disagree with the opinion that a little bit of exposure to gold is a good thing, I do think this is perhaps the wrong time to add this exposure.

With interest rates in the United States expected to rise at least twice more this year, I believe widening bond yields will place significant pressure on the gold price.

This in turn is likely to put pressure on the share prices of Australia’s gold miners. As a result, I would suggest investors stay clear of the gold miners for the time being.

In the meantime I would sooner invest in these explosive growth shares than the gold miners.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you’re expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you’ll be sorely disappointed. Not only are their dividends growing at a snail’s pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these “new breed” blue chips couldn’t be greater… especially the very real prospect of significant share price gains, something that’s looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. 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.