Why are ASX 200 gold stocks on a rollercoaster lately?

Today, it's another down day for ASX 200 gold stocks after some sizzling gains posted on Monday.

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Key points
  • ASX 200 gold stocks are down sharply today after rocketing higher on Monday
  • The gold price soared following the collapse of Silicon Valley Bank and amid the early woes of Credit Suisse
  • Bullion retraced 2% overnight as investor angst subsides, with the Fed and European central banks backstopping their key financial institutions

S&P/ASX 200 Index (ASX: XJO) gold stocks have been unusually volatile over the past week and a half.

The big Aussie gold miners are enjoying some outsized gains one day, only to fall sharply the next.

And then repeat the pattern again.

Today, it's another down day after some sizzling gains on Monday and a mixed performance yesterday.

Here's how some of the leading ASX 200 gold stocks are tracking in early afternoon trade today:

  • Northern Star Resources Ltd (ASX: NST) shares are down 3.7%
  • Newcrest Mining Ltd (ASX: NCM) shares are down 1.9%
  • Evolution Mining Ltd (ASX: EVN) shares are down 2.8%
  • Gold Road Resources Ltd (ASX: GOR) shares are down 4.9%

So, why are ASX 200 gold stocks on a rollercoaster of late?

two people sit side by side on a rollercoaster ride with their hands raised in the air and happy smiles on their faces

Image source: Getty Images

ASX 200 gold stocks rocked by shifting global sentiment

While a lot of factors impact their performance, the gold miners tend to see their share prices go up and down with any big moves higher or lower in the gold price.

Investor expectations of how bullion will track into the future also play an important role.

The gold price tends to do well amid rising uncertainty and fear, which sees an increase in demand for gold due to its historic haven status.

Gold enjoyed some big price increases amid the banking crisis unfolding in the United States and Europe.

The day before news hit the wires that Silicon Valley Bank was teetering on the brink of collapse, gold was trading for US$1,814 per ounce (on 9 March). That's 7% below today's level.

Gold, and ASX 200 gold stocks, also moved higher when the banking crisis spread to Europe, pushing Credit Suisse to the brink.

But good news tends to placate investor fears and pressure the gold price.

Hence, bullion dropped on news that the Federal Reserve is providing billions of dollars in funds to support US banks.

Gold also dropped lower after the Swiss government engineered the UBS takeover of Credit Suisse.

Today, ASX 200 gold stocks are in the red largely because the gold price tumbled 2.0% overnight to US$1,944 per troy ounce.

This comes as optimism is running high that the worst of the European and US banking crises may already be behind us.

SVB Financial provides credit and banking services to The Motley Fool. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended SVB Financial. The Motley Fool Australia has recommended SVB Financial. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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