Why is everyone suddenly talking about ASX 200 gold stocks again?

Gold bars on top of gold coins.

Gold bars on top of gold coins.Well, it’s another day, another fall for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. And not just any fall. At the time of writing, the Index has cratered by a depressing 2%, which drags the ASX 200 back below 7,000 points for the first time since early January.

Since the 2023 peak that we saw for ASX 200 shares in early February, the markets have now fallen a nasty 7.8%. So why is everyone focused on ASX 200 gold stocks then?

Well, in a pattern that is emerging this week, ASX gold stocks are shining brightly today. Companies that mine the precious metal are amongst the few ASX 200 shares that have recorded gains so far this week. And what gains they have been.

Today, we have Ramelius Resources Ltd (ASX: RMS), Perseus Mining Ltd (ASX: PRU) and Northern Star Resources Ltd (ASX: NST) shares all climbing by more than 3% at the time of writing.

The ASX 200’s largest gold miner – Newcrest Mining Ltd (ASX: NCM) – is currently up by a pleasing 3.75% at just under $25 a share. And the ASX 200’s leading gainer so far today is none other than Silver Lake Resources Limited (ASX: SLR). As it currently stands, Silver Lake shares have rocketed a happy 5.9% to $1.12 each.

Yesterday, we also saw not one, but two gold exchange-traded funds (ETFs) hit new record highs.

So no wonder everyone is talking about ASX 200 gold stocks this Tuesday.

But what’s behind this pointed defiance of the broader markets? Why is everything except for gold seem to be falling?

Why is everyone buying ASX 200 gold stocks?

Well, let’s start at the beginning. These gains seem like a direct consequence of the price of gold itself. Over the past week, gold has been on fire. The yellow metal was asking as little as US$1,820 per ounce last week. But, as my Fool colleague flagged this morning, last night’s international trading saw gold prices spike as high as US$1,915 per ounce.

Gold has always been viewed as a defensive, ‘safe haven’ asset by many investors. As such, there is a belief that the precious metal is a safe place to park capital in times of economic or financial stress. Well, we appear to be fulfilling some of these criteria at the moment.

The collapse of the US tech-focused bank SVB Financial Group (Silicon Valley Bank) late last week has clearly led to some panic in the markets. ASX banks are being walloped today, as are most bank shares around the world. Tech shares are also feeling the pinch.

There are clear fears that the woes from the SVB saga might spill over into other parts of the US (and thus, global) financial system.

Whether these fears are well-founded is a topic for another time. But we can’t deny that there are fears. This is the most likely explanation as to why the gold price has so suddenly gone through the roof. And, by extension, why everyone is talking about ASX 200 gold stocks this Tuesday.

The post Why is everyone suddenly talking about ASX 200 gold stocks again? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Newcrest Mining. 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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