The gold price has hit a new high of US$2028 per ounce, prompting a rally in ASX gold shares. Gold has been on the rise all year as the pandemic has helped drive a broad shift into safe haven assets. Gold has long been used as a hedge against uncertainty and a store of value. The gold price tends to be inversely correlated to the price of assets such as shares and bonds, meaning it provides diversification benefits.
Australia is a leading global gold producer and the source of 17% of globally known gold resources. In 2019, Australia exported $23.3 billion worth of gold, making it the country’s fourth largest export commodity. There are 66 gold mines operating around the country which together produced 326 tonnes of gold last year, accounting for around 9% of global production. Here we take a look at three Australian ASX gold shares you can invest in for exposure to the rising gold price.
3 ASX gold shares benefitting from surging gold prices
Newcrest Mining Limited (ASX: NCM)
This ASX gold share is one of the world’s largest gold mining companies. It operates gold, silver, and copper mines in Australia, Canada, and Papua New Guinea. It reported a strong June quarter with gold production up 7% to 573,175 ounces. Full year production was 2,486,7389 ounces of gold, in line with guidance. Newcrest is also advancing exploration and development projects in Western Australia which are expected to add production ounces to its portfolio in due course.
Evolution Mining Ltd (ASX: EVN)
Evolution Mining is an Australian gold producer with five wholly owned mines. Four mines are located in Australia and the Red Lake mine is located in Canada. In the June quarter, Evolution produced 218,100 ounces of gold across its mines. This gave full year production of 746,463 ounces, above guidance of 715,000 ounces. Evolution has advised that the opportunity at Red Lake is greater than expected, with transformation of the mine progressing ahead of schedule.
Saracen Mineral Holdings Limited (ASX: SAR)
Saracen Mineral Holdings mines gold in the Kalgoorlie region of Western Australia. Saracen produced 145,830 ounces of gold in the June quarter. This gave FY20 production of 520,414 ounces, ahead of guidance. In FY21 Saracen forecast production of 380,000 to 400,000 ounces of gold at an all-in sustaining cost of $1,200 – $1,300 per ounce. The ASX gold share is capitalising on the high gold price to ‘future-proof’ the business. Capital is being invested in the short term to de-risk production and allow for lower costs in future.
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Motley Fool contributor Kate O'Brien 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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