Record bullion price lifts ASX gold stocks
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The news: Gold miners are among the top gainers on the ASX in early trading, climbing on the back of a record bullion price overnight.
The numbers: Spot gold was up 1.7% to a record USD2,554.05 ($3,795.10) per ounce, while US gold futures settled 1.5% higher at USD2,580.60 an ounce.
This helped boost shares of gold miners in early trading. ASX-listed shares of Newmont were up 3.9% to $78.69, Evolution Mining rose nearly 6% to $4.27, while Northern Star and Regis Resources were both up more than 4% each.
The context: Gold prices rose on expectations of an interest rate cut by the Federal Reserve next week after US data signalled a slowing of the economy.
Zero-yield bullion tends to be a preferred investment amid lower interest rates. Gold has surged more than 20% this year, boosted by robust purchasing by central banks as well as expectations of Fed rate cuts. The precious metal has also been supported by safe-haven demand amid ongoing conflicts in the Middle East and Ukraine.
What they said: "We are headed towards a lower interest rate environment so gold is becoming a lot more attractive ... I think we could potentially have a lot more frequent cuts as opposed to a bigger magnitude," Alex Ebkarian, chief operating officer at Allegiance Gold told Reuters.
The source: Reuters
