There's no holding back the rocketing gold price of late, which has proven to be excellent news to investors in S&P/ASX 200 Index (ASX: XJO) gold stocks.
The yellow metal gained again overnight, trading at new all-time highs of more than US$2,387 per ounce. It's since retraced a touch, at US$2,383 per ounce.
As you'd expect, a series of new record highs for the gold price has seen investors snapping up ASX 200 gold stocks. And it's seeing the sector strongly outperform again today.
In early afternoon trade on Friday, the ASX 200 is down 0.3%. The S&P/ASX All Ordinaries Gold Index (ASX: XGD), on the other hand, is up a welcome 1.7% at this same time.
Here's how these top ASX 200 gold stocks are tracking today:
- Northern Star Resources Ltd (ASX: NST) shares are up 0.9%
- Newmont Corp (ASX: NEM) shares are up 0.3%
- De Grey Mining Ltd (ASX: DEG) shares are up 2.6%
- Ramelius Resources Ltd(ASX: RMS) shares are up 1.9%
- Gold Road Resources Ltd (ASX: GOR) shares are up 1.8%
- Evolution Mining Ltd (ASX: EVN) shares are up 1.5%
- Bellevue Gold Ltd (ASX: BGL) shares are up 2.3%
That's some solid outperformance on a day when the benchmark index is going backwards.
But if you think that's something, have a look at the past month's returns.
One month ago the gold price stood at US$2,158 per ounce, some 10% below current levels.
Over that same month:
- Northern Star shares have gained 10.1%
- Newmont shares have gained 13.5%
- De Grey Mining shares have gained 4.4%
- Remelius Resources shares have gained 26.1%
- Gold Road shares have gained 15.3%
- Evolution Mining shares have gained 22.6%
- Bellevue Gold shares have gained 25.2%
For some context, the ASX 200 has gained 1.1% over this same period.
Here's what's driving the gold price to yet another new record high.
Gold price in uncharted territory
It appears the gold price is getting a lift today from modestly lower-than-expected inflation data out of the United States overnight.
After the US consumer price index (CPI) data came in hotter than consensus expectations on Wednesday, the March producer price index (PPI) for final demand increased by 2.1%, below consensus expectations of 2.2%.
This looks to have again increased confidence that the US Fed will begin cutting interest rates over the coming months.
Gold, which pays no yield itself, tends to perform better in low and falling-rate environments.
Commenting on the gold price moves in response to the latest US inflation data, Nicky Shiels, head of metals strategy at MKS PAMP said (quoted by Bloomberg):
The PPI is enough to provide some relief to the hot CPI print yesterday. Overall, US bonds are trading as though Fed rate hikes are coming while gold is trading as though the Fed remains in rate cutting mode, so any dovish print going forward is fuel to accelerate the established bull trend.
The yellow metal is also enjoying support from strong ongoing central bank buying.
And gold's haven status has come to the fore as investors seek a safe store of wealth amid rising geopolitical tensions in the Middle East and Eastern Europe.
