It certainly has been a great day to be a shareholder of Australian gold miners.
The gold miners are far and away the best performers on the market on Wednesday, rising strongly after the spot gold price spiked overnight.
At the time of writing the S&P/ASX All Ords Gold (Index: ^AXGD) (ASX: XGD) is up an impressive 3.5% compared to a 0.3% gain by the benchmark S&P/ASX 200.
Here is the state of play in afternoon trade for the gold miners:
- The Evolution Mining Ltd (ASX: EVN) share price is up 3.2%.
- The Gold Road Resources Ltd (ASX: GOR) share price has risen 3.6%.
- The Newcrest Mining Limited (ASX: NCM) share price has climbed 2.7%.
- The Northern Star Resources Ltd (ASX: NST) share price is up 4.8%.
- The Resolute Mining Limited (ASX: RSG) share price is 3.3% higher.
- The Saracen Mineral Holdings Limited (ASX: SAR) share price has surged 6.5% higher.
- The St Barbara Ltd (ASX: SBM) share price is up 6.4%.
Why are the gold miners storming higher?
According to Bloomberg, the price of the precious metal has been rising after the Italian government's 2019 budget revealed a significant increase in spending and its deficit, disregarding the European Union's guidelines.
This has left the market fearing that a Greek-style crisis could occur in the near future as Italy's debts spiral out of control.
Things escalated overnight when the Italian government dug its feet in despite pressure from authorities in Brussels and its E.U. partners, leading to the spot gold price rising as much as 1.5% to US$1,208 an ounce.
Should you buy the gold miners?
While I do think that having a little exposure to gold in your portfolio can be a good thing, I feel the best gold miners are currently a little on the expensive side.
In light of this, I would suggest investors wait for a decent pullback before buying any of their shares.
