The S&P/ASX 200 (ASX: XJO) has had a volatile start to the trading week. At market open this morning, the ASX 200 went on to hit yet another record all-time high, surpassing 7,200 points for the first time ever and topping out at 7,203 points at around 10:30am. Since then the index has hit the brakes, sliding 0.14% at the time of writing and sitting at 7,169.4 points. But some of the ASX shares pushing up against the broader index’s falls are ASX gold miners.
But Resolute isn’t the only gold miner on fire today. Perseus Mining Limited (ASX: PRU) is up 3% to $1.44 a share at the time of writing, while Evolution Mining Ltd (ASX: EVN) and Gold Road Resources Ltd (ASX: GOR) are also performing well, up 2.84% and 2.66%, respectively.
So why are gold miners shining today?
It probably has to do with the price of gold, which seems to be going from strength to strength. The yellow metal is currently back above U$1,900 an ounce as we start the week. Three months ago, gold was priced at close to US$1,700 an ounce. So there has been a solid appreciation in gold price over this period, which might be what’s supporting gold miners today. Gold miners are usually leveraged to the price of gold itself. So even a small increase in gold can result in a significant boost in a mining company’s profitability.
Gold (and by extension gold miners) is regarded as something of a safe haven for investors. So after a couple of months of market gyration (particularly in the tech sector), it’s not hard to see why some investors are seeking out safety in their portfolios. The recent inflation numbers out of the US might also be a factor here. Gold is held up by many investors as an effective inflation hedge.
It could be a combination of these factors that are supporting the ASX gold miners like Resolute, Gold Road and Perseus today.