ASX200 rises 26.3 points as gold stocks post impressive gains
Gold stocks saw strong gains as comments from Federal Reserve Chairman, Jerome Powell, sparked concerns over the global growth outlook.
Gold stocks Evolution Mining, Saracen Minerals and Resolute Mining all rose strongly during the day as Australian investors digested comments from the US’s Federal Reserve Chairman, Jerome Powell.
Prepared remarks from Chairman Powell, which hinted at a rate cut, deepened concerns over the outlook of the US and global economy.
Off the back of this, Spot Gold climbed as high as $1,424 overnight, as investors and speculators pushed the price of the yellow metal higher.
The price of oil was also up, moving past $60 per barrel as US stockpiles fell and concerns over production disruptions in the Gulf of Mexico mounted.
Powell’s dovish remarks push equities higher
The theme of uncertainty dominated Powell’s prepared testimony overnight.
Specifically, Chairman Powell pointed out that ‘uncertainties about the outlook have increased in recent months. In particular, economic momentum appears to have slowed in some major foreign economies, and that weakness could affect the U.S. economy’.
Nevertheless, Chairman Powell also pointed out that the Federal Reserve was ready to act appropriately to sustain the US growth outlook if necessary.
US investors took the implication of a further rate cut positively, with the S&P500 rising 0.45% and the NASDAQ up 0.75% overnight, respectively.
Australian equities played follow the leader during today’s trade, with the ASX200 rising 26.3 points by the close.
Gold stocks lead the ASX
The ASX200 reached 6716 points by the end of the day, with Australian gold stocks seeing particularly strong gains off the back of gold’s ascent above the $1,400 mark.
Resolute Mining Ltd, the A$1.10 billion gold miner proved to be the best performing ASX200 stock in morning trade – rising as much as 7.58%. Evolution Mining Ltd, another prominent gold mining and exploration company, also moved 3.49% higher.
ASX oil stocks also performed well off-the-back of oil moving past $60 per barrel. Santos was up as much as 1.61% and Beach Energy Ltd rose as much as 3.30%.
While gold and oil stocks both moved higher, financials did not fare as well. Shares in ANZ and Commonwealth Bank were both down as much as 0.96% and 0.28%, respectively.
Interestingly, even though news recently emerged concerning a potential A$100 million class action lawsuit against National Australia Bank Ltd – the stock was up 1.28% at the time of writing.
Ultimately, given that US-China trade tensions remain ongoing and as Chairman Powell aptly noted, the global outlook also remains uncertain, we could potentially see further gains from defensive stocks in the months ahead as investors grow warier.
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