Why did ASX 200 gold shares have such a rough day?

A woman holds a gold bar in one hand and puts her other hand to her forehead with an apprehensive and concerned expression on her face after watching the Ramelius share price fall todayA woman holds a gold bar in one hand and puts her other hand to her forehead with an apprehensive and concerned expression on her face after watching the Ramelius share price fall today

ASX 200 gold shares had a tough end to the week amid the falling gold price.

Gold shares on the ASX include Evolution Mining Ltd (ASX: EVN), Newcrest Mining Ltd (ASX: NCM) and Northern Star Resources Ltd (ASX: NST).

Let’s take a look at why today was a shocker for these ASX 200 gold shares.

Gold price tumbles

Evolution shares lost 5% today, while the Newcrest share price fell 2.75%. Meanwhile, the Northern Star Resources share price dropped 4.15%.

Newcrest, Evolution and Northern Star are all major gold producers.

The gold price dropped to the lowest level since April 2020 at US$1,659.47 overnight. The gold price has since recovered slightly to US$1,668.40 an ounce at the time of writing.

The gold price fell amid concerns the US Federal Reserve will raise rates sharply next week to fight inflation.

In comments cited by Reuters, Next Generation Research head Julius Baer said:

The gold market has clearly priced in a more aggressive US Federal Reserve ahead of next week’s meeting, reflecting the central bank’s determination to fight inflation.

Northern Star expects to deliver 1,560koz to 1,680koz (thousand ounces) of gold in FY23. Meanwhile, Newcrest is expecting to produce 2100 to 2,400 koz of gold in FY23. Evolution is planning to increase gold production in FY23 by 12.5% to about 720,000 ounces.

Share price snapshot

The Northern Star share price has slid 22% in the past year. Meanwhile, Evolution shares have dropped 48%, while Newcrest shares have fallen 32%.

For perspective, the S&P/ASX 200 Materials Index (ASX: SMJ) has fallen 3.51% in a year.

The post Why did ASX 200 gold shares have such a rough day? appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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