Here’s why ASX gold shares are having another stellar day

Gold prices have been rising on fears the Russian invasion of Ukraine could spiral out of control.

| More on:
woman blowing gold glitter

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • ASX gold shares outperform again today
  • Gold prices are up sharply since Russia's aggression against Ukraine began
  • Investors are seeking haven assets

A message from our CIO, Scott Phillips: “G’day Fools. If you’re like us, you’re dismayed by the events taking place in Ukraine. It is an unnecessary humanitarian tragedy. Times like these remind us that money is important, but other things are far more valuable. And yet the financial markets remain open, shares are trading, and our readers and members are looking to us for guidance. So we’ll do our best to continue to serve you, while also hoping for a swift and peaceful end to war in Ukraine.”

ASX gold shares are posting another strong day of outperformance.

The All Ordinaries Index (ASX: XAO), down 0.8% in morning trade, has bounced to a 0.2% gain at lunchtime. This follows on intraday news that the Aussie economy grew by a stronger than expected 3.4% in the fourth quarter of 2022.

But ASX gold shares are still broadly beating the benchmark.

At time of writing the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is up 1.9%. Reflecting gold’s haven status, the ASX Gold Index slipped from its 3.1% gains earlier today on the strong GDP figures. 

Why are ASX gold shares outperforming today?

As you’d expect, ASX gold shares tend to perform much better when gold prices are high. And gold prices have been soaring amid the combination of increasing inflation concerns and geopolitical instability following Russia’s invasion of Ukraine. 

While bullion slipped over the past hours from US$1,945 to US$1,932 per troy ounce, it’s well up from the US$1,908 per ounce it was trading for on 28 February. And the yellow metal remains 7.3% above its 1 February level of US$1,801 per ounce. 

Commenting on the forces driving gold prices higher, and helping ASX gold shares outperform again, Gary Dugan, CEO of Global CIO Office said (quoted by Bloomberg):

The whole crisis has gone to a level that we couldn’t have believed, and investors are no longer saying we’ll buy some defensive stocks or bonds. It’s now about buying gold especially against the backdrop of inflation risks that have been made worse by the conflict.

Yeap Jun Rong, a strategist at IG Asia added: 

Gold may continue to outperform other haven assets, with an added tailwind from central bank purchases and also displaying its characteristic as an inflation hedge. The conflict has not seen any signs of easing and further escalation may heighten risks of persistent inflationary pressures, which will continue to draw traction for gold prices.

4 outperforming gold miners

We can’t cover all of the ASX gold shares here, but below are 4 that are handily beating the index today.

With gold high on global investors’ radars, the Newcrest Mining Ltd (ASX: NCM) share price is up 1.3%.

S&P/ASX 200 Index (ASX: XJO) listed Evolution Mining Ltd (ASX:EVN) is also charging higher, up 2.2%, while the Northern Star Resources Ltd (ASX: NST) share price is up 1.6%.

Leading the pack of ASX gold shares today is AngloGold Ashanti CDI (ASX: AGG). The Anglogold share price is up 7.7%. 

The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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.

More on Gold

Gold nuggets with a share price chart.

Down 20% so far in 2022, is the Newcrest share price a bargain buy or a falling knife?

Newcrest may or may not be at a turning point.

Read more »

gold, gold miner, gold discovery, gold nugget, gold price,

3 ASX gold shares surging ahead on Friday

It's a good day on the ASX for gold shares.

Read more »

rising gold share price represented by a green arrow on piles of gold block

ASX gold share Peregrine explodes 60% on ‘spectacular’ new find

Gold shares are in the money on Friday.

Read more »

a woman wearing a sparkly strapless dress leans on a neat stack of six gold bars as she smiles and looks to the side as though she is very happy and protective of her stash. She also has gold fingernails and gold glitter pieces affixed to her cheeks.

When will Firefinch shares resume trading?

Firefinch shares won't be back online until the company finalises its funding proposal. Here's how long the gold miner thinks…

Read more »

A man standing in a red rock mine is covered by a sheet of gold blowing in the wind.

What’s the outlook for the gold price in FY23?

We check what's impacting gold prices in the current climate.

Read more »

A boy holds a gold bar with a surprised look on his face due to falling ASX gold mining shares including the Newcrest share price

How are ASX 200 gold shares reacting to the RBA rate hike?

With interest rates heading sharply higher across most of the world, gold prices have dropped some 4% this calendar year,…

Read more »

rising gold share price represented by a green arrow on piles of gold block

Metalstech share price soars 11% on ‘milestone achievement’

Metalstech continues it walk into the green.

Read more »

a man wearing a hard hat stands in front of heavy mining machinery with a serious look on his face.
Materials Shares

The Newcrest share price tumbled 8% in July. What went wrong?

We check what's been happening with the global gold and copper miner.

Read more »