Is it time to buy ASX gold miners like Newcrest Mining?

The recent market volatility is giving some ASX gold miners a share price boost, is now the time to buy?

There are many gold miners out there such as Newcrest Mining Limited (ASX: NCM), St Barbara Ltd (ASX: SBM), Northern Star Resources Ltd (ASX: NST) and Evolution Mining Limited (ASX: EVN).

The theory goes that gold is a safe haven asset and goes up when share markets go down. I suppose if people believe that and act upon it then it’s a self-fulfilling prophecy.

Each miner has their positives and negatives. They have different mines at different life stages with different production costs. Each one should be judged on their own merits, I personally couldn’t tell you which one is the best – I don’t have an opinion.

I have seen some fund managers favour some gold miners over others, for example WAM Leaders Ltd (ASX: WLE) holds Evolution Mining and Newcrest in its top 20 holdings.

As with any resource producer, the gold miners are reliant on the price of their product for both their bottom line profit and share price.

Ignoring the companies for a moment, gold itself is not a great investment. It may have slowly gone up in price over the centuries, but its returns have been abysmal compared to shares. Gold doesn’t produce any cashflow for you, you can’t re-invest with it. It just sits there. At least you can earn interest with cash.

If you’re able to time the market and buy gold miners when they’re at a low price and sell when fear hits the market then you could technically do well. But, as we all know, it’s impossible to predict market movements so I think for long-term investors you’re better off going for ASX growth shares that truly glitter year after year.

Motley Fool contributor Tristan Harrison 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 Scott Phillips.

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