How the gold price is impacting these ASX gold shares

ASX gold shares have come under pressure in recent months even as many ASX resource shares are booming. We take a closer look.

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gold bars falling to the ground and smashing representing falling prices of ASX gold shares

Image source: Getty Images

S&P/ASX 200 Index (ASX: XJO) gold shares have been lagging the wider index in 2021.

While the ASX 200 is up 5.2% year-to-date, the largest ASX gold shares are all in the red for the year.

Now there are numerous factors at play that determine a gold miner’s share price. These include management, debt levels, and any changes in their resource estimates, to name a few. Most of the major gold producers are also involved with other precious metals, like copper and silver.

With that said, the price of the yellow metal they dig from the ground is a key element in determining what investors are willing to pay for gold producers’ shares.

What’s happening with the gold price?

On 1 January this year, an ounce of gold was worth US$1,899 (AU$2,466). Gold briefly looked like it might top US$2,000 again as it rallied to US$1,950 on 5 January. But it’s been mostly downhill since then.

At the time of writing, an ounce of gold is worth US$1,773. That’s down 6.7% year-to-date and down 14% from the US$2,063 it was trading for on 6 August 2020.

ASX gold shares, as you’d expect, have been seeing their share prices come under pressure.

What’s happening with these ASX gold shares?

Newcrest Mining Ltd (ASX: NCM) counts as the largest of the ASX gold shares, with a market cap of $21.7 billion. While still in the red, the Newcrest share price has outperformed its peers in 2021, with shares down 2.8% year-to-date. Newcrest shares closed today down 0.94%, trading at $26.27.

Northern Star Resources Ltd (ASX: NST) is another heavyweight among the ASX gold shares. And the Northern Star share price, slipping 0.3% today, is down 21.1% year-to-date.

With a market cap of $7.9 billion, Evolution Mining Ltd (ASX: EVN) is certainly no minnow. And it, too, has seen shares retreat in the face of a falling gold price. The Evolution share price is down 1.1% in intraday trading today and down 13.1% so far in 2021.

What next for ASX gold shares?

As mentioned above, there are many factors that determine a specific company’s share price. But when your primary focus is mining gold, you’ll always be tied to the gold price.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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