It's been a great week for S&P/ASX 200 Index (ASX: XJO) gold stocks.
Investors in the big Aussie gold shares largely have a resurgent gold price to thank for that.
This time last week an ounce of gold was trading for US$1,980.82 per troy ounce.
Today that same ounce is worth US$2,045.46 per ounce, up 3.3%. That's less than US$30 below the all-time highs gold briefly touched in the wake of the pandemic in August 2020.
As we often see with the big gold producers, their share prices have gone up considerably more than that 3.3% over the last week. This is because the cost of digging the yellow metal from the ground is fixed. So any rise, or fall, in bullion prices goes straight to the bottom line.
And it's why the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller miners outside of ASX 200 gold stocks – has soared 7.9% over the past five trading days.
For some context, the ASX 200 has only edged up 0.2% over that period.
Here's how these four ASX 200 gold stocks have performed over the past five trading days:
- Northern Star Resources Ltd (ASX: NST) shares have gained 9.8%
- Ramelius Resources Ltd (ASX: RMS) shares have gained 9.8%
- Gold Road Resources Ltd (ASX: GOR) shares have gained 6.1%
- Evolution Mining Ltd (ASX: EVN) shares have gained 9.8%
Interestingly, three of the miners have gained almost exactly three times the increase in the five-day gold price.
What's going on with the gold price?
The gold price has been enjoying support from several fronts.
First, gold's haven status saw a marked uptick in demand following the Hamas terrorist attack on Israel and the ensuing war in the West Bank. Ongoing geopolitical conflict and economic uncertainty elsewhere across the globe is also seeing increased demand for physical gold, particularly from central banks.
The gold price – and by extension ASX 200 gold stocks – are also moving higher with investors increasingly confident that the US Federal Reserve is not only done with interest rate hikes but that the world's top central bank will begin to cut rates in 2024 as inflation comes back within target range.
Gold, which pays no yield, tends to struggle amid higher interest rates.
Over the weekend, Goldman Sachs released a bullish note on the outlook for gold, noting its "shine is returning".
According to the broker (courtesy of CNBC):
The potential upside in gold prices will be closely tied to US real rates and dollar moves, but we also expect persistent strong consumer demand from China and India, alongside central bank buying to offset downward pressures from upside growth surprises and rate cut repricing.
How have these four ASX 200 gold stocks performed longer-term?
The big Aussie gold producers have had a great run over the past 12 months amid a 17% increase in the gold price.
Here's how these ASX 200 gold stocks have performed over the past full year:
- Northern Star shares have gained 20.2%
- Ramelius shares have gained 96.5%
- Gold Road shares have gained 9.4%
- Evolution shares have gained 51.5%
They say that all that glitters is not gold.
But shareholders in these Aussie gold miners might disagree.
