ASX 200 gold shares reverse the charge higher to tumble today. Here’s why

plummeting gold share price

plummeting gold share price

S&P/ASX 200 Index (ASX: XJO) gold shares were broadly enjoying a very strong run this week.

Until today.

Here’s how some of the biggest Aussie gold miners are tracking in early afternoon trade on Friday.

  • Northern Star Resources Ltd (ASX: NST) shares are down 2.0%
  • Newcrest Mining Ltd (ASX: NCM) shares are down 2.0%
  • Evolution Mining Ltd (ASX: EVN) shares are down 4.8%
  • Gold Road Resources Ltd (ASX: GOR) shares are down 4.2%
  • Perseus Mining Ltd (ASX: PRU) shares are down 3.0%

And this comes as the ASX 200 itself has climbed back into the green, up 0.1%.

So, after most of these stocks were leaping higher earlier this week, what’s dragging them down today?

Bad news is good and good news is bad?

Gold’s classic haven status means ASX 200 gold shares often do well when financial news headlines are dominated by bad news. That tends to see a sharp increase in the demand for gold, driving up the price.

On the flip side, the gold miners tend to struggle when that news turns happier and gold prices slip.

As you’re likely aware there’s been plenty of alarming news out in recent days helping boost ASX 200 gold shares.

First, there was the Silicon Valley Bank collapse in the United States last Friday.

The day before that news broke gold was trading for US$1,831 per ounce. By Monday the yellow metal was fetching US$1,914 per ounce.

With the US banking crisis spreading to Europe, and the viability of Credit Suisse coming into doubt this week, gold had edged all the way to US$1,932 per ounce yesterday, up 5.5% in a week.

Today some of that fear has been lifted from global markets amid a huge influx of funds from the US Federal Reserve and the Swiss National Bank to backstop their nations’ banks.

That’s the good news.

After all, who doesn’t love a good taxpayer-funded bank bailout?

Well, not ASX 200 gold shares, apparently.

With investors more upbeat about the outlook for global banks, the gold price has dipped to US$1,923 today, down about 0.5%.

How have these ASX 200 gold shares performed longer-term?

As long-term investors, it pays to take a step back and judge a stock’s performance over at least a five-year period.

With that in mind, here’s how the ASX 200 gold shares listed above have performed over the past five years:

  • Northern Star Resources shares have gained 61%
  • Newcrest Mining shares are up 22%
  • Evolution Mining shares have lost 15%
  • Gold Road Resources shares have gained 88%
  • Perseus Mining shares are up 363%

The post ASX 200 gold shares reverse the charge higher to tumble today. Here’s why appeared first on The Motley Fool Australia.

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SVB Financial provides credit and banking services to The Motley Fool. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended SVB Financial. The Motley Fool Australia has recommended SVB Financial. 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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