MENU

Australian gold miners race higher

Unfortunately for the second time this week the Australian share market is a sea of red in morning trade following heavy declines in U.S. markets overnight.

But one group of shares has managed to defy the market and push higher today – the gold miners.

At the time of writing the S&P/ASX All Ords Gold (Index: ^AXGD) (ASX: XGD) is up by 0.9% to 4,744.5 points.

Here is the state of play in the industry at the moment:

  • The Evolution Mining Ltd (ASX: EVN) share price is up almost 3% to $2.75.
  • The Newcrest Mining Limited (ASX: NCM) share price is 1% higher to $21.93.
  • The Northern Star Resources Ltd (ASX: NST) share price has climbed 1.5% to $5.79.
  • The OceanaGold Corporation (ASX: OGC) share price is up 4% to $3.24.
  • The Resolute Mining Limited (ASX: RSG) share price is 2% higher at $1.08.
  • The Regis Resources Limited (ASX: RRL) share price is up 1% to $3.98.
  • The Saracen Mineral Holdings Limited (ASX: SAR) share price has climbed 2% to $1.44.
  • The St Barbara Ltd (ASX: SBM) share price has pushed 2% higher to $3.72.

Why are the gold miners higher?

Today’s gold miner gains appear to be related to a flight to safety by investors after the U.S. market corrected amid concerns that rising interest rates will drag down economic growth. Fellow safe haven assets the Japanese yen and Swiss franc have also pushed higher.

Whilst I can understand the latter two, I’m not entirely sure why investors have flocked to gold. After all, the reason that markets are melting is the prospect of quicker than anticipated interest rate rises.

And as rates rise, bond yields tend to widen. Generally this will reduce the allure of yield-less gold, causing its price to fall. After all, if you can get a risk-free 3% yield from a Treasury Bond, why would you put your money in the precious metal in volatile times?

In light of this, I continue to believe that investors ought to stay clear of the gold miners and would instead suggest looking for bargain shares to buy after today’s sell-off.

These growth shares, for example, would be where I put my money during this sell-off.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean 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 2018."

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%.

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 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.

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.