The Newcrest Mining Ltd (ASX: NCM) share price is sliding hard today, down 4.6% in late morning trade.
Newcrest shares closed Friday at $23.04 and are currently trading for $22.01.
But it's not just the Newcrest share price under pressure.
Most of the ASX gold producers are deep in the red, as witnessed by the 6.9% intraday losses posted by the S&P/ASX All Ordinaries Gold Index (ASX: XGD). Meanwhile, the All Ordinaries Index (ASX: XAO) is up 1.7%.
With today's losses factored in, the Newcrest share price is down 23% from pre-pandemic levels, with 21 February 2020 the final pre-pandemic day of trading on the ASX.
So, what gives?
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Why are ASX gold shares under pressure?
Sticking with 21 February 2020 as the final pre-pandemic day, the All Ordinaries is down 5% since that date while the All Ords Gold Index has tanked by 28%.
Looking at the gold price, the yellow metal was trading for US$1,643 per troy ounce pre-pandemic, significantly lower than the current US$1,832 per ounce.
So it looks to be more gold's fall from a peak of US$2,050 in March this year that's pressuring gold shares.
Over the past months investors have become increasingly nervous over the potential of a recession in the United States, the world's biggest economy. Those concerns have seen the prices for copper, iron ore and most industrial metals tumble.
While the gold price has held up better, the Newcrest share price and other gold stocks have faced stiff headwinds from fast rising interest rates.
Aggressive tightening by the US Federal Reserve has seen a stronger greenback and an uptick in yields of US Treasuries. That's of particular importance for gold stocks because both the US dollar and US government bonds are go-to haven assets in times of uncertainty. While gold, also a classic safe haven asset, doesn't pay any interest.
Newcrest share price was post-pandemic positive two months ago
The real pressure on the Newcrest share price and the broader gold sector has really only come into play over the past few months.
In fact, on 19 April this year, Newcrest shares closed at $28.84, edging out the US$28.72 per share the company closed at on 21 February 2020.
