Why did ASX 200 gold shares lag the index today?

ASX 200 gold shares had a tough run on the market today.

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

Let’s take a look at what may have impacted ASX 200 gold shares today.

What happened?

The Newcrest Mining share price fell 0.99% today, while Northern Star Resources shares dropped 0.6%. Meanwhile, the Evolution Mining share price was flat today. In contrast, the S&P/ASX 200 Index (ASX: XJO) climbed 0.23% today.

This follows the gold price falling overnight. Spot gold fell 0.65% to US$1,764 an ounce.

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

Gold prices fell amid a stronger US dollar and treasury yields rising. Fear of interest rate rises impacted the US dollar.

Commenting on the gold price in a research note today, ANZ senior economist Adelaide Timbrell said:

Gold edge lower amid further hawkish comments from the Fed. James Bullard called for the Fed to raise rates to at least 5.00–5.25%, calling it a minimum level of ‘sufficiently restrictive’.

St Louis Federal Reserve president and CEO James Bullard, speaking at an economic event in Louisville Kentucky, indicated rates could rise by up to 7%.

Commenting further on Bullard’s remarks, ANZ’s Timbrell added:

The USD climbed following his comments, and bond yields rose. This weighed in investor demand, with spot gold declining nearly 1%.

Meanwhile, Northern Star provided an exploration update to the market this week. The company said it has spent $48 million on FY23 exploration to date. Ongoing exploration has highlighted significant “life of mine” extension potential.

Managing director Stuart Tonkin said:

Our exploration team has made a strong start to FY23, advancing some exciting early-stage prospects across our global tier-1 portfolio as well as expanding beyond known areas of mineralisation.

Newcrest announced this week that the Brucejack mine in Canada has resumed operations. The mine shut in October following a fatality at the mine. The FY23 production guidance for the mine remains unchanged.

Share price snapshot

The Newcrest Mining share price has fallen 24% in the past year, while Northern Star Resources shares have descended nearly 5% in the last 52 weeks.

Evolution Mining shares have descended nearly 42% in the last year.

For perspective, the ASX 200 has fallen 3% in the last year.

The post Why did ASX 200 gold shares lag the index today? appeared first on The Motley Fool Australia.

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More reading

• Is a weak US dollar good for ASX 200 mining shares?
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

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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