In early afternoon trade the St Barbara Ltd (ASX: SBM) share price has given back its early gains and is down over 1% to $3.71 despite the release of a positive first-half production update.
What was in the release?
This morning the gold miner announced that its Gwalia and Simberi mines produced a total of 197,768 ounces of gold in the first-half of FY 2018.
The amount of gold produced was ahead of expectations, leading to management upgrading its full-year production guidance.
Instead of its previous guidance of 350,000 to 375,000 ounces, the company now expects to produce 365,000 to 385,000 ounces this year.
So why are its shares lower?
It's not often that you will see a gold miner upgrade its production guidance and then sink into the red, so no doubt investors are curious about this one.
I suspect that today's decline is a combination of factors. One could be that traders may have already anticipated a production upgrade, but expected a greater increase.
After all, St Barbara's shares have been on a tear over the last 12 months and risen a massive 63%.
Another factor weighing on its shares is likely to be a fall in the gold price overnight. Gold is down slightly to US$1,317 an ounce after the U.S. dollar strengthened.
This has led to the majority of Australia's gold miners dropping lower today. The Resolute Mining Limited (ASX: RSG) share price is down 2.5%, the Northern Star Resources Ltd (ASX: NST) share price is 3% lower, and the Saracen Mineral Holdings Limited (ASX: SAR) share price is almost 2% lower.
As a result, at the time of writing the S&P/ASX All Ords Gold (Index: ^AXGD) (ASX: XGD) has fallen 0.6%.
Should you invest?
As I expect the U.S. dollar to strengthen this year as its interest rates rise, I feel there's a chance the gold price could take a tumble. In light of this, I wouldn't be a buyer of the gold miners at this point.