This small cap gold explorer got the Midas Touch. The Ramelius Resources Limited (ASX: RMS) share price raced up to a two-month high on a double tailwind.
The Ramelius share price jumped 12.5% to 45 cents during lunch time trade after releasing the latest set of drilling results from its Mount Magnet and Edna May sites.
But the RMS share price isn't the only one in the sector bucking the broader market downtrend. The Regis Resources Limited (ASX: RRL) share price, Northern Star Resources Ltd (ASX: NST) share price and Resolute Mining Limited (ASX: RSG) share price dominate the top three spots on the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) leader board at the time of writing with gains of 3% or more.
In contrast, the S&P/ASX 200 shed 2% of its value and is trading at around 5,569 points.
That's particularly bearish for ASX shares as some experts believe a break below 5,600 will open the possibility of our market falling further.
Gold Bulls in the China Shop
That's unless you are a gold miner as the risk-off sentiment is good for the price of the precious metal.
Gold is seen as a safe-haven asset during times of economic distress and recent geo-political events have certainly put us in that category.
The fragile trade war truce between the US and China is under threat after the arrest of Huawei's chief financial officer Meng Wanzhou in Canada at the request of US authorities.
Economic growth in the US also appears to have peaked with a number of economic indicators, including the jobs data, pointing lower recently.
The turmoil in the White House with the resignation of US President Donald Trump's chief of staff, John Kelly, isn't helping either and the uncertainty overclouding markets appears to stretch well into 2019.
Second Tailwind
That's good news for Ramelius' shareholders, who also got excited after the explorer said it found "spectacular gold intersections" at Mt Magnet with as much as 1,271 grams of gold per tonne that's 7 meters deep from a depth of 29 meters.
The miner also struck "significant broad zones of gold mineralisation" from its deeper diamond drilling exercise and strong infill drilling results.
There were also encouraging early results from Edna May with 9 meters at 2.07 grams of gold per tonne from 69 meters.
Foolish Takeaway
I think it's a good idea to have exposure to gold given the recent unsettling market weakness. I am still bullish on the ASX in the short-term and I am expecting a bounce next week, although it's a good idea to hedge my bets by buying selected gold stocks.
I tend to favour producers rather than explorers if I am looking to leverage gold price strength as explorers often will take years before they can sell any commercial quantities of the precious metal.
