It's been a volatile yet overall positive day for the S&P/ASX 200 Index (ASX: XJO) so far this Monday.
After opening in the red this morning, investors have since regained some optimism, with the ASX 200 now up a tentative 0.09% at around 7,978 points. But let's talk about what's going on with ASX gold shares.
Unlike most ASX 200 shares, gold stocks have been a roaring investing success this session.
Take the ASX 200's largest gold share, Newmont Corporation (ASX: NEM). Newmont shares are currently enjoying a 1.05% bounce up to $74.90 a share, which isn't too far from this miner's all-time ASX high of $76.23.
But Newmont isn't the only ASX gold share enjoying a big, market-beating boost this Monday. Northern Star Resources (ASX: NST) shares are doing even better, up 1.6% at $14.43 each.
Perseus Mining Ltd (ASX: PRU) is faring similarly, with Perseus shares rising a strong 2.6% to $2.57.
De Grey Mining Ltd (ASX: DEG) and Evolution Mining Ltd (ASX: EVN) are in a better ballpark again, up 2.2% and 2.8%, respectively.
But Gold Road Resources Ltd (ASX: GOR) and Emerald Resources N.L. (ASX: EMR) are taking out the top spots. Gold Road shares have vaulted 3.45% higher to $1.86, while Emerald stock is up a chunky 4.3% to $4.
Image source: Getty Images
Why are ASX gold shares exploding higher today?
We don't have to look too far for a catalyst for these decisive moves in the ASX gold space.
As my Fool colleague James reported this morning, gold itself has just reached a new record high, jumping 1.8% over the weekend to US$2,537.80. That's the first time the precious metal has traded at over US$2,500 an ounce.
According to CNBC, gold has pushed even higher since, with futures now pricing the metal as high as US$2,541.40 per ounce.
Reporting from Bloomberg points to expectations of steeper rate cuts over in the United States for these latest highs.
Bloomberg argued that "a disappointing reading on the US housing market reinforced expectations of fast and deeper cuts by the Fed" is behind this latest high. That's in addition to factors like higher geopolitical tensions and large central bank purchases of gold that have already boosted the precious metal's price this year.
Gold as an investment pays no interest or yield, so lower rates decrease the opportunity cost of holding gold against other yield-bearing assets like bonds and shares.
Some experts predict that gold will rise even further. The report quotes Bart Melek, global head of commodity strategy at TD Securities, as stating that "prices could rise further to [US]$2,700 in the coming quarters, as the macro/monetary and central bank ducks are aligning in a row."
So it's perhaps no wonder that ASX gold shares like Newmont, Northern Star, and Emerald Resources are having such a strong session this Monday. Let's see how the rest of the week treats this sector.
