It certainly hasn't been a great day to be invested in Australia's leading gold miners.
In early afternoon trade the S&P/ASX All Ords Gold (Index: ^AXGD) (ASX: XGD) is down 3.5%, reducing its year-to-date return to 6%.
Weighing heavily on the gold index today are the following shares:
- The Evolution Mining Ltd (ASX: EVN) share price is down 2.5% to $2.42.
- The Newcrest Mining Limited (ASX: NCM) share price is off 3% to $20.79.
- The Perseus Mining Limited (ASX: PRU) share price has dropped 4% to 29.7 cents.
- The Regis Resources Limited (ASX: RRL) share price is down 4.5% to $3.17.
- The Resolute Mining Limited (ASX: RSG) share price is down 5% to $1.17.
- The Saracen Mineral Holdings Limited (ASX: SAR) share price has dropped 4% to $1.05.
- The St Barbara Ltd (ASX: SBM) share price has fallen 4.5% to $2.91.
What happened?
A combination of investors returning to risk assets and a drop in the gold price appear to be behind today's sharp decline.
The spot gold price rose strongly overnight on Monday after President Trump talked down the U.S. dollar and reports of the terror attack in Manchester emerged.
But since then gold has given back the majority of these gains and sits at US$1,252 an ounce once again.
What's next?
Whilst I am bearish on the gold price in the long-term, in the short to medium term I expect it could remain in or around its current level.
Whilst this could mean bumper profits for some of Australia's low-cost gold producers, I think this has been largely priced into the shares at this point.
Because of this I would suggest investors continue to focus on other areas of the market.
