The S&P/ASX 200 Index (ASX: XJO) enjoyed a day on the green today, closing up 0.16% to 7,313 points.
However, one sector did not join the party today. And that would be ASX gold miners.
Gold miners have fallen almost across the board. Take the largest by market capitalisation, Newcrest Mining Ltd (ASX: NCM). Newcrest shares closed down 1.60% at $25.28.
But investors in other gold miners wouldn’t be green with envy at that number. Miners like Regis Resources Limited (ASX: RRL), Northern Star Resources Ltd (ASX: NST), Gold Road Resources Ltd (ASX: GOR) and Perseus Mining Limited (ASX: PRU) fared little better.
Perseus actually finished in the green today, up 0.34%. But Northern Star, Gold Road and Regis were down 1.51%, 1.56% and 1.67% respectively. Regis Resources actually finished on a new 52-week low of $2.36.
ASX investors take a gold shower
So why are we seeing such weakness across the board in this sector today? Well, as you might guess, it might be related to the price of gold itself. Gold is not in demand right now.
The yellow metal has continued to trade lower and sunk to an 11-week low over the past 24 hours. It’s going for US$1,761 an ounce a the time of writing.
It was only back at the start of June that gold was over US$1,900 an ounce. That was a 6-month high at the time. So this slide in the value of gold itself has clearly knocked some value off of the ASX companies that dig it out of the ground today.
Gold is often referred to as a ‘safe haven’ or ‘hedge’ asset. That’s because there’s a belief out there that gold tends to perform well during times of market uncertainty or stress. Especially when inflation is involved.
Conversely, when markets are strong and hitting new all-time highs (as they have been around the world over the past 2 months or so), gold often gets forgotten about. This may be why we are seeing an apparent lack of interest in gold and gold miners at the current time.