S&P/ASX 200 Index (ASX: XJO) gold stocks count amongst the strongest performers on the benchmark index over the past six months.
Since 22 January, the ASX 200 has gained a very healthy 6.09%.
Over that same time period the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller miners outside of the ASX 200 gold stocks – has rocketed 23.35%.
Here's how these top Aussie producers have fared over the last six months:
- Northern Star Resources Ltd (ASX: NST) shares are up 15.42%
- Newmont Corp (ASX: NEM) shares are up 34.81%
- De Grey Mining Ltd (ASX: DEG) shares are up 3.88%
- Ramelius Resources Ltd (ASX: RMS) shares are up 26.95%
- Gold Road Resources Ltd (ASX: GOR) shares are up 6.25%
- Evolution Mining Ltd (ASX: EVN) shares are up 28.43%
- Bellevue Gold Ltd (ASX: BGL) shares are up 22.95%
- Perseus Mining Ltd (ASX: PRU) shares are up 47.78%
- Red 5 Ltd (ASX: RED) shares are up 33.33%
As you'd expect from this list of very strong performance, ASX 200 gold stocks have been enjoying the fruits of a rapidly increasing gold price.
Six months ago, the yellow metal was trading for US$2,021.70 per ounce. Bullion then began its rapid march higher, hitting new all-time highs of US$2,483.73 an ounce last Wednesday.
At time of writing, the gold price stands at US$2,403.72 per ounce, up 19.0% in six months.
That's our look in the rearview. So, what's all this about a four-year hedge fund record?
A bullish signal for ASX 200 gold stocks?
In what looks like a bullish indicator for ASX 200 gold stocks for the months ahead, Bloomberg reports that as of 17 July, hedge funds and "other large speculators" had increased their net-long position in gold to the highest level in more than four years.
The money managers are likely topping up their gold bets amid increasing odds of interest rate cuts from the US Federal Reserve and rising geopolitical uncertainty surrounding the US presidential elections.
On the geopolitical tensions front, Kyle Rodda, a financial market analyst at Capital.com said (quoted by Reuters):
I think there is an almost unstoppable process of decoupling between the US and China, it will only become more severe or accelerate if it is a Trump presidency. Gold will certainly benefit from greater geopolitical tensions.
As for Fed interest rate easing the gold price – and by connection ASX 200 gold stocks – stand to potentially benefit in two ways.
First, gold pays no yield itself and, therefore, tends to perform better in times of falling interest rates.
Second, gold is priced in US dollars. And both the prospect of lower US interest rates and a Donald Trump presidency (with Trump favouring a weaker greenback) would likely see the US dollar fall.
