While the S&P/ASX200 (ASX: XJO) closed down 3.1% on Thursday, gold mining share prices rallied. Among the high-performers were Newcrest Mining Limited (ASX: NCM), Saracen Mineral Holdings Limited (ASX: SAR) and St Barbara Ltd (ASX: SBM).
These company shares have reacted positively to a rising gold price this week. The commodity was up 0.18% on Thursday. In addition, the uncertainty facing markets and the easing restrictions around the world is likely to have added a positive sentiment to gold mining share prices. Gold can be a popular investment during times when economies become volatile, and the current situation appears no different.
While share prices around the world have recovered considerably, the US Federal Reserve flagged concerns about the negative effect of the coronavirus on the US economy. This uncertainty, along with the fact the Federal Reserve will continue printing money, has likely contributed to the current rally for gold miners.
The Newcrest Mining share price rose 5.67% on Thursday and was supported by positive exploration results. Newcrest Mining has been listed on the ASX since 1987 and trades on a fully franked dividend yield of 1.15%. Like most companies, Newcrest has experienced volatility as a result of the coronavirus crisis but its share price has since recovered to above its price at the beginning of 2020.
The Saracen Minerals share price is up 4.57%, showing a positive reaction to gold prices in line with its peers. Saracen Minerals has two operations in Western Australia and late last year it acquired a 50% stake in the Kalgoorlie Super Pit. Saracen produced a record 355,000 ounces of gold in 2019. The gold mining company’s share price is up 71% from its 52 week low of $2.81. It has risen 45% since the beginning of the year.
The St Barbara share price is up 5.33% at a price of $3.16 at the time of writing. The company provided guidance for the 2020 financial year in a presentation released yesterday. It expects production to be up 6.35% on last year to 385,000 ounces. The gold miner will also be cutting costs at its Western Australia operations. The St Barbara share price is up 22% since this time last year.
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Motley Fool contributor Chris Chitty 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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