While not all gold producers have managed to push higher this morning, Evolution Mining Ltd [ASX:EVN], Saracen Mineral Holdings Ltd [ASX:SAR], Northern Star Resources Ltd [ASX:NST], and Newcrest Mining Ltd [ASX:NCM] have all made considerable gains.
St Barbara’s share price has clearly been the better performer this morning, making up for a sluggish past few days.
Fellow Australian gold producer Evolution Mining hasn’t been far behind, with a 3.80% gain to $2.73.
What caused the rise in Aussie gold producers?
It seems that the Australian market has reflected a similar trend out of Europe and North America overnight.
News coming out of Italy warns of a Greek-style crisis as Italy’s finance minister, Giovanni Tria, had his efforts to promote his government’s new fiscal strategy end in failure. The turmoil appears to have given gold and silver a haven-demand boost at a time when fund managers are looking to precious metals to rebalance their asset mix
Gold and silver prices soared early in New York, with gold contracts equal to some 1.57 million ounces traded. That is almost 12 times the 100-day average for this time of day.
What’s next for St Barbara and Aussie gold producers?
On just the third day of trading for October, it is anyone’s guess whether this trend will continue. However, with the ever present anti-EU sentiment growing in Italy and its now botched efforts to cut its deficit, we could see more investors continue to take a more risk averse approach.
With gold hitting a one-week high, and silver hitting its four-week high, these bullish markets are certainly encouraging.
Gold futures for December went up 1.5% to US$1209.70 per ounce, set for the biggest gain since late August. Silver futures advanced to 3.1% to $14.95 per ounce, also its biggest gain since late August.
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For Money Morning