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Is now the time to buy ASX gold mining stocks?

Some of Australia’s biggest gold miners saw their share prices pop on Friday as global gold prices surged higher to end the week.

With the level of uncertainty in domestic and global equities and a slowing growth outlook, could now be the time to fill your boots with ASX gold mining stocks?

What happened to ASX200 gold miners on Friday?

Among the big-name miners,  Saracen Mineral Holdings Ltd (ASX: SAR), Resolute Mining Ltd (ASX: RSG) and Newcrest Mining Ltd (ASX: NCM) saw their share prices rocket higher to close out the week.

The Saracen share price led the pack, closing out the week 10.86% higher at $4.49 per share having hit a new 52-week high of $4.54 during the day’s trade.

The Resolute Mining share price similarly popped on Friday and soared 10.71% to $1.86 at market close and also set a new high watermark for the year at $1.95 per share.

The Newcrest share price posted a 7.19% gain through to Friday’s close and saw its share price climb higher still to $36.66 per share to continue its strong start to the year.

Why did the Aussie gold miners perform so strongly?

The biggest factor impacting on ASX gold mining stocks on Friday were global gold prices, with risk-off sentiment seeing investors flock to the traditional safe-haven asset which subsequently drove up prices.

Saracen was the only company of the trio to make any update of sorts to the ASX as the company released the first Supplementary Bidder’s Statement in its off-market bid for Bligh Resources Ltd (ASX: BGH).

However, it was the gold prices that were responsible for most of the gold mining gains we saw in Friday’s trade.

Why did global gold prices surge on Friday?

The big catalyst for gold prices rocketing higher on Friday was U.S. President Donald Trump’s announcement of a further 10% tariff on US$300 billion (A$441 billion) worth of Chinese imports from September 1.

Investors took that as a sign of worsening negotiations between China and the U.S. and flocked towards the safety of gold, driving up demand and therefore prices on Friday and sending the ASX gold mining stocks higher.

Another key factor has been a recently dovish U.S. Federal Reserve, with a change in their wording seemingly indicating a willingness to cut U.S. interest rates even further if market conditions deteriorate further.

Is now the time to buy?

Despite Friday’s surge, I still think there’s potential for the ASX gold miners to see their share prices climb higher in the second half of the year.

If there are to be further rate cuts and the trade war negotiations do worsen, I’d expect to see heightened demand for gold, and if these companies can report solid production and cost control in August, this could be just the start for the Aussie gold mining stocks.

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Motley Fool contributor Kenneth 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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