What: Gold bugs were in their element on Monday with the sector arguably acting as it should – as a store of value with the precious metal gaining ground as investors sold off equities.
By the close of the trading session, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) had fallen 0.9%, meanwhile the S&P/ASX All Ordinaries Gold (Sub Industry) index rallied a massive 3.1% on the back of a near 1% rise in the gold price. Gold is currently trading at a three-month high.
So What: The rally in the gold price sent many gold stocks soaring during Monday's session. These were some of the stand-out performers:
- Silver Lake Resources Limited. (ASX: SLR) soared 19.4%
- Medusa Mining Limited (ASX: MML) rallied 15.9%
- EVOLUTION FPO (ASX: EVN) lifted 11.5%
- Perseus Mining Limited (ASX: PRU) added 10.7%
- Beadell Resources Ltd (ASX: BDR) gained 9.7%
- Regis Resources Limited (ASX: RRL) jumped 8.1%
- Troy Resources Ltd (ASX: TRY) climbed 5.5%
Now What: Overnight the gold price continued to climb higher, adding a further 0.7% to around US$1,164 an ounce. With the ASX futures pointing towards a soft opening there will be further impetus for gold stocks to head even higher today.
Indeed with the gold price (when expressed in US dollars) still down over the past year, gold bulls might suspect there is plenty more room to run. For Australian gold miners and investors however, of equal importance is the direction of the Australian dollar as this has the potential to improve (or reduce) returns even if the US gold price tracks sideways.
