Analyzing ASX 200 Gold Share Performance Amidst Gold's Rally

2 min read | November 17, 2023 01:51 PM AEDT | By Team Kalkine Media

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The price of gold rose again overnight, leading to surge in the S&P/ASX 200 Index (ASX:XJO) gold-related stocks.

Currently, gold is trading at US$1,984.00 (AU$3,067.41) per troy ounce. This marks a 0.2% increase overnight and a 3.3% rise compared to this time last month, contributing to the support of most gold producers.

Three prominent ASX 200 gold-related stocks are performing as follows today and over the past month:

- Northern Star Resources Ltd (ASX: NST) share price increased by 3.71% today and 4.08% in the last month.

- Regis Resources Ltd (ASX: RRL) shares have increased by 1.99% today and 10.49% in the past month.

- Evolution Mining Ltd (ASX: EVN) shares surged by 4.31% today and 8.53% in the previous month.

For perspective, the ASX 200 has decreased by 0.2% over the past month.

The ongoing conflicts in the Middle East is also a reason of increase in gold prices. Gold's traditional safe-haven status became evident after the Hamas terror attack on Israel on October 7. Gold has seen an 8.2% surge since the day before the attack when it stood at US$1,833.01.

Additionally, investor support for gold has increased as major central banks worldwide appear to be near or at the end of a rapid cycle of interest rate hikes due to a decrease in inflation. Gold, which doesn't offer yield, typically faces challenges when interest rates are high or rising.

David Meger, director of metals trading at High Ridge Futures, highlighted the stability in October's consumer price index (CPI) and the decline in the producer price index (PPI) figures in the United States as supporting factors for gold prices. He noted that these results support the expectation that inflation will continue to decrease, leading to the belief that the Federal Reserve is finished with interest rate hikes.

Furthermore, the gold price and ASX 200 gold-related shares are benefiting from strong central bank buying. Louise Street, associated with the World Gold Council as senior markets analyst, expressed optimism about future gold demand. She stated, "Looking forward, with increasing geopolitical tensions and an anticipation of continued robust central bank buying, gold demand might exceed expectations."

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