The best-performing shares within the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) came within the gold sector today, after the gold price and Australian dollar hit 4-month highs at around the same time.
On the market leading gold miners Newcrest Mining Limited (ASX: NCM), Northern Star Resources Ltd (ASX: EVN), Evolution Mining Ltd (ASX: EVN) and Resolute Mining Limited gained 3%, 4.5%, 6.7% and 5.9% respectively. This is on the back of the US dollar price of gold hitting US$1,344 today, just off a 52-week high.
The price of gold moves in mysterious ways with many pundits claiming rising yields on US interest, cash and debt rates would make gold a less attractive asset class. However, it seems the prospect of a return to inflation and monetary tightening are sending the precious metal higher.
Given the divergent forces driving the gold price its direction is impossible to predict, with some even claiming the value of currency is decreasing, rather than the value of gold rising, as the dawn of crypto-currencies acts as a counterweight to money printing or quantitate easing.
The Australian dollar is also near US80 cents today as rising commodity prices and bets that "synchronised global growth" can support risk-on currencies send the local dollar higher.
Some credible analysts are also expecting an RBA cash rate hike at the end of 2018, although if that does not materialise the Australian dollar is likely to edge lower over the next 12-18 months.
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