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Gold miners sink lower again

The market may be sinking into the red again today, but one area of the market has fallen more than most.

At the time of writing the S&P/ASX All Ords Gold (Index: ^AXGD) (ASX: XGD) is down 1.5%, wiping out all of its weekly gains.

Here’s the state of play in the industry at lunch:

  • The Doray Minerals Limited (ASX: DRM) share price has fallen 5% to 27 cents.
  • The Newcrest Mining Limited (ASX: NCM) share price is down 2% to $22.52.
  • The Northern Star Resources Ltd (ASX: NST) share price is off 2.6% to $5.89.
  • The Resolute Mining Limited (ASX: RSG) share price has fallen 2.2% to $1.10.
  • The Saracen Mineral Holdings Limited (ASX: SAR) share price is down 2.8% to $1.52.
  • The Silver Lake Resources Limited. (ASX: SLR) share price has dropped 2% to 39 cents.

What happened?

The gold price has come under pressure in recent days after bond yields widened in the United States.

Generally, as risk-free bond yields increase the gold price will fall as the precious metal loses appeal with traders due to its lack of yield.

So with rates in the United States expected to rise three times this year, I suspect bond yields could continue to widen and put further pressure on the gold price. This could make it a good time to consider taking profit on the gold miners.

It isn’t all bad news today.

There has been one bright spot amongst the sea of red. The OceanaGold Corporation (ASX: OGC) share price has climbed almost 5% higher today after reporting record annual gold production yesterday after the market closed.

OceanaGold achieved record annual production of 574,606 ounces in FY 2017 at an unaudited all-in sustaining cost of US$617 per ounce. This was an impressive 38% lift in production and a 13% reduction in its all-in sustaining costs.

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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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