ASX gold miners surge as the metal's price climbs to record high
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The news: Gold miners surged on the ASX as gold prices climbed to new record highs overnight, boosted by the US Federal Reserve's forecasts for three rate cuts later this year.
The numbers: Gold prices rallied to fresh record highs of USD2,222 ($3,356) an ounce overnight after the Fed left rates unchanged for a fifth consecutive meeting. However it stated its intention to make 0.75 percentage points worth of interest rate cuts during the year.
ASX gold miners Bellevue Gold (7.6%), West African Resources (7.6%), Red 5 (7.5%), Ramelius Resources (6%), De Grey Mining (5%), Capricorn Metals (4.7%), Perseus Mining (4.5%) and Newmont (3.4%) were all trading higher by 1:45pm AEDT.
Meanwhile, Evolution Mining, up 5.1% to $3.48, also received a ratings upgrade from Morgan Stanley analysts, who raised its target price from $3.35 to $3.95. Analysts noted the Sydney-based miner had the lowest implied gold price and therefore had "the largest upside to spot gold prices" within its coverage.
The context: Investors typically buy up gold ahead of rate cuts, as non-yielding assets like gold and silver tend to perform well in lower-rate environments.
The precious metal has remained above the benchmark USD2,000-an-ounce level since mid-December, as expectations rise on US interest rate cuts in June this year.
The source: Morgan Stanley research
