The All Ordinaries index may be pushing higher again on Thursday, but one group of shares vastly outperforming the index are the gold miners.
At the time of writing the S&P/ASX All Ords Gold index is up a remarkable 2.8% thanks to a strong gain by the gold price overnight.
According to CNBC, the spot gold price rose 1.4% to US$1,420.40 an ounce overnight and has continued to strengthen during Asian trade. At the time of writing the spot gold price is up to US$1,426 an ounce.
Why is the gold price charging higher?
The catalyst for the rise in the gold price was a testimony by U.S. Federal Reserve chair Jerome Powell overnight which indicated that a rate cut would be coming very soon.
Mr Powell said: "Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook."
And as we have seen with the Reserve Bank of Australia, one rate cut often turns into two or more cuts in the following months.
This is likely to put a lot of pressure on the yields on offer from bonds and increase the allure of gold, much to the delight of the locally listed gold miners.
Here is the state of play in the industry this morning:
The Evolution Mining Ltd (ASX: EVN) share price is up 2.5% to $4.43.
The Newcrest Mining Limited (ASX: NCM) share price has climbed 2.5% to $32.29.
The Northern Star Resources Ltd (ASX: NST) share price has risen 2.5% to $11.94.
The Ramelius Resources Limited (ASX: RMS) share price has stormed 5% higher to 83 cents.
The St Barbara Ltd (ASX: SBM) share price is up 3.5% to $3.24.
The Resolute Mining Limited (ASX: RSG) share price has surged 8% higher to $1.50.
