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.
