Shares in Value Logo
Product Review Img Vertical

Date : 16/03/2021

ASX-Listed gold stocks are up. Learn why.

Gold is a crisis asset. Uncertainty in the global economy results in investors buying gold as it is considered as the most secure investment option. This makes gold into a safe haven. Gold prices have soared since late April as the pandemic wreaked havoc in global markets. Every time a stimulus is unveiled by the government, gold prices have surged due the possibility of inflation going up.

Higher gold prices increase profitability of gold stocks as their margins go up. This has resulted in most gold stocks being valued higher than they were prior to the crisis, so much so that stock price charts closely resemble the chart of the commodity.

This year, however, we have seen a lot of consolidation in gold prices, just as we predicted back on January 6th, 2021. Gold prices and hence gold stocks have come under pressure because of the risk-on approach that investors have towards equity markets. The arrival of a vaccine and improved economic activity has meant that gold has been put under pressure. The rising bond yields have also meant that gold and silver continued to fall off-late.

Today, however, the Australian gold index AXGD rose for the second consecutive day, soaring 1.3%. As a result, several ASX gold stocks rose as well given that the price of the underlying commodity rose.

Newcrest Mining soared 1.8% and reached A$24.410 today, its highest since 25 February 2021. Going forward, we expect gold prices to perform the same this year. There will be ups and downs, but we do not expect gold prices to see the highs we did at the tail end of 2019. Even though there is inflation coming back in and gold is usually used as a hedge, the fact is that it is a bit more complicated than that. Along with free money being printed by central banks, investors and traders are excited by the ease in restrictions as we move away from the pandemic. This leads to risk-on effect towards equity markets in the short-term – putting a ceiling on bond prices and gold prices. All of the top ASX listed gold stocks of 2020 are down as a result of the macroeconomics at play. For long-term investors, this does open up an opportunity to buy gold stocks on the cheap.

Looking for Assistance to Choose the Right Stocks?

Growth stocks are potentially one of the hardest to pick as there are a lot of factors that need to be considered – from industry tailwinds to financial health of the individual stocks, and a lot of little things in between them. Shares in Value research team have picked their top 3 ASX stocks to buy in 2021. Click here to download the report for free.

Are You Looking To Buy The Best Stocks In 2022?

Stay on top of upcoming market trends! Whether you are an SMSF investor or a young investor with your portfolio, we cover a wide range of stocks across all sectors, including mining, financials, industrials, real estate, technology, health and biotech, etc. It will give you an edge to invest and trade ASX listed stocks across large, mid and small caps with an advantage.

Get stock tips with our Market Experts. We help self-directed investors and self-managed super funds (SMSF) make smarter investment decisions and get better returns. Fill in your details and download your free Report instantly for Top 3 Dividend Stocks to buy in 2022!

 

Top 5 ASX Stocks
to Buy for Capital Growth in 2022

asx landing page
The hardest part to finding growth stocks is having an ability to understand the finer details of these companies from their valuations through to first mover advantage and having key factors on hand to make informed investment decisions.

Our experts take the guesswork out.

Download Your Free Report

By downloading this report you agree to the TERMS AND CONDITIONS and our PRIVACY POLICY

Scroll to Top

Login

By submitting this form, I agree to the TERMS AND CONDITIONS and PRIVATE POLICY

Please fill in your details to download the free report.