ASX-listed gold miners are going nuts again in early trading after gold rallied as much as 2.3% overnight.
The spot gold price soared to US$1,346 an ounce overnight, the highest price in two weeks with investors convinced the US Federal Reserve is unlikely to raise interest rates anytime soon – despite suggestions of a cut in September.
Some analysts see the Fed's policy statement as a reluctance to raise interest rates too quickly – meaning the attractiveness of gold remains in a world where trillions of dollars of bonds are paying (receiving?) negative interest rates. At least holding gold doesn't cost the investor much.
| Company | Gain | Market Cap ($m) |
| Millennium Minerals Ltd. (ASX: MOY) | 12.8% | $200.5 |
| Resolute Mining Limited (ASX: RSG) | 8.3% | $1,029.3 |
| Northern Star Resources Ltd (ASX: NST) | 6.4% | $3,008.7 |
| St Barbara Ltd (ASX: SBM) | 4.6% | $1,475.4 |
| Medusa Mining Limited (ASX: MML) | 7.1% | $147.9 |
| OceanaGold Corporation (ASX: OGC) | 6.0% | $2,915.0 |
| Ramelius Resources Limited (ASX: RMS) | 6.5% | $273.3 |
| Regis Resources Limited (ASX: RRL) | 4.0% | $1,939.5 |
| Saracen Mineral Holdings Limited (ASX: SAR) | 5.5% | $1,338.9 |
| Beadell Resources Ltd (ASX: BDR) | 5.7% | $490.6 |
| Perseus Mining Limited (ASX: PRU) | 4.2% | $632.8 |
Source: Google Finance
Many Australian gold miners are also due to report their full year results and at current gold prices are making a mint. That's thanks to the Australian dollar trading at around US 75.2 cents – which puts the A$ gold price at around A$1,790 an ounce. With all-in sustaining costs of between A$1,000 to A$1,100 an ounce, their margins are huge.
Foolish takeaway
Debt is being paid down and several gold producers are even paying dividends. But investors might need to be careful of those reinvesting most of the proceeds in highly speculative ventures or exploration. Stick to those paying even modest dividends is likely a better strategy.
