Market Mover | Australian gold stocks surge as gold prices hit record high

Moomoo News AU wrote a column · Sep 13, 2024 11:13

Following Wall Street's lead, the Australian share market opened higher today, buoyed by positive economic data that reinforced expectations of a Federal Reserve rate cut next week in the US. This optimism is set to carry the market through to the end of the week. Gains on the ASX 200 are predominantly driven by gold miners, as gold prices reached an all-time high. $Ramelius Resources Ltd (RMS.AU)$ shares surged 8.61% to A$2.27, $West African Resources Ltd (WAF.AU)$ shares jumped 8.66% to A$1.505, $Evolution Mining Ltd (EVN.AU)$ shares climbed 7.80% to A$4.355, and $Gold Road Resources Ltd (GOR.AU)$ shares rose 5.13% to A$1.64.

Factors driving the overnight gold prices

The ASX 200 gold stocks are experiencing a strong run today, closely tied to the overnight surge in gold prices. This is largely attributed to the fact that global interest rates are finally coming down, as bullion typically performs better in low and falling interest rate environments. On Thursday, the European Central Bank (ECB) cut the Eurozone's official interest rate by 0.25% for the second time this year, now standing at 3.50%. Additionally, the recent US inflation and unemployment data have further strengthened the prospects of a Federal Reserve rate cut in the coming week.

As stated in the previous article, there are also other factors driving gold prices this year, including rising geopolitical tensions and the increase in gold reserves by central banks around the world.

How to seize opportunities for potentially rising gold prices?

In addition to the gold stocks mentioned above, gold-related exchange-traded funds (ETFs) including $ProShares Ultra Gold (UGL.US)$, $DB GOLD DOUBLE LONG EXCH TRADED NOTES (DGP.US)$, have also seen significant gains this year, with substantial year-to-date returns.