Regis Resources Share Price Up 5.00% as Gold Price Firms

Regis Resources Limited [ASX:RRL] is up 5.20% since trading began this morning. It’s currently trading at $4.62, up 22 cents. The move comes as the gold price regains its momentum as investors begin to steer away from a battered global equities market.

RRL is a gold production and exploration company with a market cap of $2.23 billion. The company focuses on its tenement package in the Eastern Goldfields of Western Australia. Its main projects include Moolart Well, Garden Well, Erlistoun and Rosemont.

Global equity uncertainty helps Regis Resources share price

As the ASX suffers losses across the board today, dragged down by a volatile US market, Australia’s gold miners have limited their sector’s losses.

Gold producers are among today’s best performing companies on the ASX200 with Northern Star [ASX:NST], Saracen Mineral [ASX:SAR] and St Barbara Ltd [ASX:SBM] all posting strong gains.

Since the S&P 500 Index hit its lowest point on Monday since October 2017, gold and its producers have been making considerable ground. Fondness of the precious metal has been growing amid concerns over slowing global growth and speculation the US Fed may pause its tightening cycle in 2019.

According to Bloomberg, investors have been boosting holdings in bullion-backed exchange-traded funds as of late, as spot prices are poised for a third monthly rise.

As investors turn their attention to what lies ahead in 2019, banks have cited gold bullion as a commodity that is well placed to rally.

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Goldman Sachs has forecast the metal may hit US$1,350 per ounce within the next 12 months, a steep rise from its current price of US$1,250 per ounce.

According to Gavin Wendt, a senior analyst at MineLife, gold equities are rebounding on the back of renewed interest in the precious metal. Wendt believes gold equities have been lagging behind other market sectors and are undervalued.

Is 2019 looking bright for gold producers?

With 2019 only weeks away, Australia’s gold producers could be set for a bumper year. As the yield curve of US bonds flattens, potentially signalling a downturn in the economy, investors will be looking for other options to make returns on their investments.

Regis is poised to capitalise if the demand for gold jumps in the new year. The company currently has a number of exploration projects in progress across its holdings, which has identified significant options to increase gold production in the future.

St Barbara announced last week it has entered into an additional 50,000 ounces of forward gold contracts at a price of US$1,300 per ounce, close to Goldman Sachs forecasted price.

Saracen Mineral have made a strong start to their FY2019 exploration campaign. In a recent announcement the company outlined a strategy to increase production to 400,000 ounces per annum, committing $60 million to further exploration of FY2019.


Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

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