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Why the gold miners are sinking like stones today

Although the market as a whole has slipped lower again today, the gold miners have been amongst the worst performers on the market following another dip in the gold price.

Overnight the gold price fell to a four-month low of US$1,261 an ounce amid a strengthening U.S. dollar.

Furthermore, the lack of a catalyst to take the precious metal higher means that it could come under further selling pressure over the coming weeks according to Chintan Karnani from Insignia Consultants.

Karnani also told MarketWatch that the continued rise in the Bitcoin price is holding down gold prices as well.

Bitcoin is currently fetching US$11,692 a coin, according to CoinDesk, closing in on another record high.

In light of this negative outlook on the gold price it will come as no surprise to learn that the S&P/ASX All Ords Gold (Index: ^AXGD) (ASX: XGD) has tumbled 1.6% lower today.

Amongst the biggest declines in the industry include:

  • The Evolution Mining Ltd (ASX: EVN) share price is off 2.5% to $2.37.
  • The Newcrest Mining Limited (ASX: NCM) share price is down 1.5% to $22.90.
  • The Northern Star Resources Ltd (ASX: NST) share price has fallen 2% to $5.72.
  • The Resolute Mining Limited (ASX: RSG) share price is lower by 2.5% to 98 cents.
  • The Saracen Mineral Holdings Limited (ASX: SAR) share price has fallen 2.5% to $1.46.

What now?

As the U.S. economy continues its recovery and rates begin to normalise in 2018, I expect gold will lose its appeal with investors, leading to a sharp drop in the precious metal’s price.

In light of this, I think now would be a great time to take profit and reallocate funds elsewhere in the share market.

Instead of the gold miners I would suggest investors consider these hot tech stocks.

Analyst reveals 3 revolutionary tech companies to watch on the ASX

Entire new industries and technologies unheard of 15 years ago are now regular parts of our lives.

It's difficult to keep up with new developments - but if you think things are changing fast now, you haven't seen anything yet. We're in the midst of a technology revolution full of opportunities to make huge amounts of money.

We've found 3 Aussie companies at the forefront of this revolution. For everything you need to know, go here!

Motley Fool contributor James Mickleboro has no position in any of the 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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