It seems all that glitters is gold in 2023 as a new ‘gold rush’ drives global markets.
Historically, whenever investors have got a whiff of economic uncertainty, they’ve piled into gold - a safe haven in troubled times.
This time is no different.
A macroeconomic storm fuelled by a new global banking crisis, the war in Ukraine, rampant inflation and uncertainty over the direction of US interest rates has sent gold prices to near all-time highs.
This week saw the precious metal trade either side of the $2000/oz mark as market volatility stoked demand.
The World Gold Council says that shaky market conditions are putting gold back into sharp focus.
“There's a level of market concern and uncertainty in general which drives people to gold as a safe haven asset,” the Council said.
It’s the proverbial canary in the coal mine - if you want a true indicator of whether the market is stable or not, monitor the price of gold and gold stocks.
And if it's on a tear, it’s probably because the economic conditions ain’t so hot right now.
A recent mammoth AUD$24 billion takeover offer for ASX-listed Newcrest by the world’s largest gold producer, Newmont, shows just how attractive the precious metal is right now.
The proposal, though rejected, would have been the largest in gold sector history.
Fitch this week predicted a strong 2023 for gold stocks, lifting its year-end forecast from US$1850/oz to US$1950/oz.
Expect the foreshadowed interest rate movements by the US Federal Reserve this year to put heat under gold prices.
Goldman Sachs is forecasting the peak funds rate to be 5.25-5.5%, with an additional 25 basis point hike in May and June.
In a sea of uncertainty, it seems that all that glitters IS gold. Watch this space.
These ASX-based gold miners had the “midas touch” this year.
|
Company |
Market cap |
YTD price change |
|
Newcrest Mining (ASX: NCM) |
$23.39B |
+25.58% |
|
Perseus (ASX: PRU) |
$3.19B |
+9.91% |
|
Ramelius Resources (ASX: RMS) |
$1.01B |
+22.87% |
|
Northern Star Resources (ASX: NST) |
$13.26B |
+3.78% |
|
Bellevue Gold (ASX: BGL) |
$1.38B |
+4.27% |
|
De Grey Mining (ASX: DEG) |
$2.37B |
+12.59% |
|
Westgold Resources (ASX: WGX) |
$558.87M |
+31.11% |
|
Kingsgate Consolidated (ASX: KCN) |
$444.85M |
+14.86% |
|
Mindax Limited (ASX: MDX) |
$207.18M |
+110% |
|
Ausgold Ltd (ASX: AUC) |
$103.50M |
+2% |
|
Breaker Resources (ASX: BRB) |
$127.47M |
+14.71% |