Ukraine Worries Spark Rush for Australian Gold Stocks
14 February 2022 - 1:24PM
Dow Jones News
By Rhiannon Hoyle
Investors are rushing to gold-mining stocks amid concerns that
Russia could invade Ukraine, providing a windfall for a sector that
had been softening on expectations of rising rates, which typically
spell weakness for gold.
In Australia, gold stocks led the S&P/ASX 200 higher,
accounting for nine of the top 10 biggest risers by early Monday
afternoon in Sydney. Spot gold was up roughly $1 at $1,859 a troy
ounce.
Newcrest Mining Ltd., the country's largest listed gold miner,
was among the top performing stocks. It was recently up 5.2% at
23.89 Australian dollars (US$17.05 a share).
The move extends a rebound for Newcrest, which struck a two-year
low of A$20.91 a share at the end of January, ahead of first-half
earnings result on Feb. 17 that some analysts think will include
plans for a share buyback.
Regis Resources Ltd. was the biggest winner, trading 8.7% higher
at A$2.00 a share. Regis shares have slid over the past year to a
six-year low as the miner grapples with operational challenges.
Gold prices have been rising as tensions between Russia and
Ukraine increased. Some investors flock to gold during times of
geopolitical turbulence, expecting it to hold value even when other
assets struggle. A surge in inflation has also aided the metal,
which is widely viewed as an inflation hedge.
Still, gold remains well below its 2020 record of more than
$2,000 an ounce.
Investors have been betting that the Federal Reserve will act
aggressively to curb inflation. Tighter central bank policy
typically reduces the appeal of gold, which pays no regular
income.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 13, 2022 21:09 ET (02:09 GMT)
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