What Made this Gold Stock Plunge Today On ASX - SAR?

  • Nov 28, 2018 AEDT
  • Team Kalkine
What Made this Gold Stock Plunge Today On ASX - SAR?

Although Saracen Mineral Holdings Limited (ASX: SAR) made two new highly prospective discoveries at its Carosue Dam Corridor, still a negative impact was seen in the share price of the company. In the morning, the market price of the share was $2.530 which is also the highest price of the day. It went as low as $2.320 and closed at A$2.380 with the market capitalization of A$2.1 billion with the PE ratio of 27.56x. The total volume of shares which traded on 28 November 2018 was 5,263,952.

This fall in the price was not based on the performance of the company, rather its impact is seen on other companies as well who is into the same metal and mining industry. As per the S&P/ASX 300 Metals and Mining, there is a fall in the price by 1%. A global impact is seen in the gold prices. On the global scale, no sooner an update regarding the fall in gold prices, the vice president of FED (Federal reserve bank) highlighted the upcoming inflation in the interest rate which impacted the gold price at the US to go down by US$8.75 and the last traded price of gold was US$1214. The factors which might have impacted the share price was due to the weak talk between China and the USA about its upcoming G-20 conference has made global market slow down.

Apart from the USA, major impact was also seen in Europe. Europe at present is under the phase of depression.

ETF is a preferred method of gold ownership amongst the financial institutions as well as funds. It also highlights the level of interest of the investors as well as the other major market participants. As per the data from the renowned sources, the gold ETF performed steadily by 2016. In North America, there was a marginal growth in the ETF ’s from the beginning of 2016. On the other hand, European's interest increased regarding gold ETF but due to certain internal problems within Europe, there was a fall in the interest of gold ETF by the end of 2018. One major cause which has impacted the European market is the Brexit and an upcoming possibility of instability in Italy.

This will have a major impact not only in Italy and other European countries but across the globe where gold ETF is popular among investors which forms a part of their investment portfolio.

XGD (ISHARES S&P TSX GLOBAL GLD INDEX ETF) gold ETF traded at A$4904.20/oz. The spot price of the gold was down by 9.68% and was recorded as A$1680.16/oz which is equivalent to $1214.50.


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