Several big-name ASX gold miners have seen their share prices hammered lower in early trade as global gold prices fell on a US dollar rally overnight.
What happened to gold prices?
Gold prices posted double digit dollar losses overnight and fell below the US$1,300 per ounce market as the US dollar has strengthened on robust GDP growth and higher risk appetite in international equities markets.
April gold futures fell $18.90 per ounce to $1,291.40 per ounce while other defensive metals such as silver also recorded losses on the renewed positive sentiment.
The US dollar has climbed higher on lower jobless claims and the potential for a breakthrough in the ongoing US-China trade tensions as senior officials from both sides meet in Europe.
Which gold mining shares have plummeted lower?
At the time of writing, shares in Evolution Mining Ltd (ASX: EVN), Saracen Mineral Holdings Ltd (ASX: SAR) and Resolute Mining Ltd (ASX: RSG) were all trading more than 3% lower in a disappointing day for the miners.
While I expect to see some short-term volatility in the ASX gold miners on the back of ongoing geopolitical back-and-forth and the fluctuations in global markets, I think the medium-to-long-term outlook is actually quite solid.
Gold is traditionally seen as a safe-haven asset and acts as an inflation hedge, which means there’s always room for a small allocation to gold exposure.
While I’m not buying gold just yet given the trend of rising all-in sustaining costs (AISCs) and lower production volumes seen in recent trading updates, I think it’s worth keeping an eye on the ASX gold miners to pick up a bargain in the second half of the year.
For those looking more for growth in 2019, I think it’s worth checking out this top-rated growth stock in a booming $22 billion industry that could see its share price soar later this year.
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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.