Why Australia’s gold miners are being smashed today

It certainly hasn’t been a great day to be invested in Australia’s leading gold miners.

In early afternoon trade the S&P/ASX All Ords Gold (Index: ^AXGD) (ASX: XGD) is down 3.5%, reducing its year-to-date return to 6%.

Weighing heavily on the gold index today are the following shares:

  • The Evolution Mining Ltd (ASX: EVN) share price is down 2.5% to $2.42.
  • The Newcrest Mining Limited (ASX: NCM) share price is off 3% to $20.79.
  • The Perseus Mining Limited (ASX: PRU) share price has dropped 4% to 29.7 cents.
  • The Regis Resources Limited (ASX: RRL) share price is down 4.5% to $3.17.
  • The Resolute Mining Limited (ASX: RSG) share price is down 5% to $1.17.
  • The Saracen Mineral Holdings Limited (ASX: SAR) share price has dropped 4% to $1.05.
  • The St Barbara Ltd (ASX: SBM) share price has fallen 4.5% to $2.91.

What happened?

A combination of investors returning to risk assets and a drop in the gold price appear to be behind today’s sharp decline.

The spot gold price rose strongly overnight on Monday after President Trump talked down the U.S. dollar and reports of the terror attack in Manchester emerged.

But since then gold has given back the majority of these gains and sits at US$1,252 an ounce once again.

What’s next?

Whilst I am bearish on the gold price in the long-term, in the short to medium term I expect it could remain in or around its current level.

Whilst this could mean bumper profits for some of Australia’s low-cost gold producers, I think this has been largely priced into the shares at this point.

Because of this I would suggest investors continue to focus on other areas of the market.

Instead of risking your hard-earned money in the gold miners, I would suggest you consider an investment in one of these explosive growth shares. Each has been growing like wildfire and I expect more of the same in FY 2017.

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.

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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.

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