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Newcrest and other ASX gold miners lead top gainers despite risk-off sentiment

Several big-name ASX gold miners have led the ASX gainers today as an inverted US yield curve and economic growth concerns have triggered a massive risk-off move in the markets today.

The S&P/ASX200 Index (ASX: XJO) has fallen 1.2% to 6,120 points at the time of writing after the US 10-year Treasury yield fell below that of the US 3-month T-Bill for the first time since 2007.

A dovish Fed commentary halting monetary policy normalisation and its planned quantitative tightening program also didn’t help the market’s shakiness, while weak economic data out of Germany ensured that the ASX began the week in the red.

What’s happened to ASX gold mining stocks?

Investors look to have flocked towards the traditional safe-haven asset of gold, with the top 5 ASX200 gainers consisting of gold miners this morning.

The gains have been led by Newcrest Mining Ltd (ASX: NCM), Evolution Mining Ltd (ASX: EVN) and Resolute Mining Ltd (ASX: RSG) which have seen their share prices climb 2.4%, 2.2% and 2.1% higher, respectively.

Rounding out the top 5 were St Barbara Ltd (ASX: SBM) which was up 1.8% after last week’s 20% share price wipeout, while the Regis Resources Ltd (ASX: RRL) share price has risen the risk-off moves 1.4% higher.

It’s not unusual to see gold miners do well in times of economic distress or perceived economic weakness, and today has been no exception.

When used to invest tactically, gold can provide an appropriate inflation hedge and act as a somewhat negative or neutral beta which can offset the downward trend in most other holdings which would be in the red today.

However, given the lower production volumes and higher cost guidance that we’ve seen from the likes of St Barbara and Dacian Gold Ltd (ASX: DCN) in recent days, I still wouldn’t be looking to jump into ASX gold miners just yet.

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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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