Saracen Minerals Holdings Ltd’s [ASX:SAR] share price has jumped up 5.07% this morning to $2.39, despite Australian shares taking a plunge following big losses on Wall Street.
The mineral exploration company focuses on gold production and has a portfolio of exploration assets situated in the North Eastern Kalgoorlie Goldfields of Western Australia.
Why has Saracen escaped the carnage?
US indices plummeted overnight on the back of concerns regarding the looming trade war and a belligerent central bank.
As expected, Australian shares followed this morning with the ASX 200 down 30 points, after a slight recovery. The All Ords was also down 28.9 points, or 0.48% at noon.
Saracen and other Australian gold miners managed to buck the trend and make some good gains as investors fled to the safe-haven of gold.
Gold prices rose in the US as investors targeted the US$1,250 level in order to recoup their losses suffered earlier in the year.
Spot bullion and gold futures were both on track to make a third-straight week for gains, defying an ever-stronger US dollar.
After falling from a 2018 peak of US$1,343.80 in February, gold returned to US$1,200 in August, reaffirming its position as the safe-haven of choice for risk-averse investors.
What’s next for Saracen?
Saracen has been one of the strongest performing gold producers on the ASX this year, up 75.37% in the last 12 months.
With a recent quarterly report of record production, low operating costs and strong free cash flow, Saracen is looking like an attractive option for investors. The company has also announced a $60 million FY19 exploration budget.
Next year could see even stronger gains as SAR’s growing inventory, set to tip 400,000 ounces per annum.
With both US and Australian markets looking shaky at the moment, Australian gold producers potentially look set to capitalise on investors diminishing appetite for risk.
For Money Morning
PS: If you’re thinking of jumping aboard on Aussie gold stocks you could be making a huge financial blunder! One resources expert believes the gold price is set to head lower this year. Find out why here.