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ASX gold mining shares charging higher this week on strong gold prices

The ASX200 gold miners have put a slow start for the Aussie share market behind them to surge higher today on the back of ever-climbing global gold prices.

At the time of writing, the S&P/ASX200 Index (ASX: XJO) is trading 0.4% lower at 6,148.4 points, but Saracen Minerals Holdings Ltd (ASX: SAR), Newcrest Mining Ltd (ASX: NCM) and New Hope Corporation Ltd (ASX: NHC) are all up over 2% in early trade.

What’s driving the gold price higher today?

Global gold prices have been on the march lately and the UK gold price jumped 2.3% today after UK Prime Minister Theresa May’s Brexit deal was comprehensively beaten in a Parliamentary vote.

The latest vote means the UK is staring a “hard Brexit” with the European Union in the face and is due to crash out on March 29 unless delayed by a Parliamentary vote to be held tomorrow.

Investors have taken the news badly and flocked to the traditionally safe-haven asset which has pushed the UK gold price rose to £996 (A$1,841) per ounce overnight.

Why has gold been on such a bullish run?

The ASX gold miners have enjoyed a strong week, with a weak US jobs report pushing prices higher yesterday as well.

The U.S. Labor Department released its March 2019 report which showed non-farm payrolls increased by 20,000, significantly missing estimates, which saw US equities and US equities weaken slightly on the news.

As the global equities markets remain somewhat volatile, the technical environment for gold remains supportive as a safe-haven asset and I think the risk-off sentiment in markets is likely to continue while Brexit and US-China trade war concerns persist.

Foolish takeaway

With the February reporting season done and dusted, the gold miners have emerged unscathed and given rising uncertainty about economic growth and global trade restrictions, they remain a strong diversification option within the ASX200.

For those who are looking for more growth than safety, I’d suggest checking out these top growth shares that have been tipped as market beaters.

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Motley Fool contributor Lachlan Hall 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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