Why ASX 200 gold stocks like Northern Star and Evolution Mining are storming higher today

S&P/ASX 200 Index (ASX: XJO) gold stocks, including Northern Star Resources Ltd (ASX: NST) and Evolution Mining Ltd (ASX: EVN) are charging higher today.

In early afternoon trade on Tuesday, the ASX 200 is up 0.4%, having given back earlier intraday gains of 1.6%.

The gold miners’ strong rally is coming off the boil as well, though ASX gold shares are still outpacing the benchmark. At the time of writing, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is up 2.6% after having been up 5.3% in morning trade.

Here’s how these ASX 200 gold stocks are performing at this same time:

• Northern Star shares are up 2.0% at $17.55
• Newmont Corp (ASX: NEM) shares are up 4.8% at $138.10
• Evolution Mining shares are up 3.1% at $11.86
• Ramelius Resources Ltd (ASX: RMS) shares are up 3.3% at $3.42
• Bellevue Gold Ltd (ASX: BGL) shares are up 0.4% at $1.26
• Genesis Minerals Ltd (ASX: GMD) shares are up 6.3% at $5.69
• Perseus Mining Ltd (ASX: PRU) shares are up 2.4% at $4.67
• Vault Minerals Ltd (ASX: VAU) shares are up 2.1% at $3.69
• Westgold Resources Ltd (ASX: WGX) shares are up 3.1% at $5.18
• Ora Banda Mining Ltd (ASX: OBM) shares are down 1.0% at $1.04

Boom!

With the exception of Ora Banda, here’s why the Aussie gold miners are outperforming today.

ASX 200 gold stocks rally on Trump’s Iran reprieve

After getting hammered throughout most of March following the outbreak of the Iran war on 28 February, ASX 200 gold stocks like Evolution Mining and Northern Star are rallying today amid hopes that the conflict could end sooner than later.

This comes after United States President Donald Trump extended his 48-hour deadline to begin bombing Iranian power plants if Iran doesn’t fully reopen the Strait of Hormuz.

Trump offered a five-day reprieve, saying the US is in talks with Iran. An assertion that Iranian authorities have denied.

As you’ll have noticed at the petrol station, the oil price has rocketed since the start of the war, with Iran all but closing the vital shipping route in retaliation.

Indeed, on Friday, Brent crude oil was trading north of US$112 per barrel, according to data from Bloomberg.

But the oil price plunged almost 11% overnight, briefly dipping below US$100 per barrel, and is currently trading at US$102.76 per barrel following Trump’s comments.

And should the US succeed in reopening the Strait of Hormuz, which carries around 20% of the world’s oil shipments, Trump predicted that the oil price would “drop like a rock”.

Why is that important for ASX 200 gold stocks like Northern Star, Newmont, and Evolution Mining?

Mostly because soaring energy costs will rekindle global inflation and, in turn, lead to higher interest rates. And gold, which pays no yield itself, historically struggles in high or rising interest rate environments.

Stay tuned!

The post Why ASX 200 gold stocks like Northern Star and Evolution Mining are storming higher today appeared first on The Motley Fool Australia.

More reading

• Which top ASX gold stock just took the biggest hit?
• 5 things to watch on the ASX 200 on Tuesday
• Down 40% in a month. Does the Northern Star share price have further to fall?
• Why Genesis Energy, Northern Star, PLS, and WiseTech shares are falling today
• Should you buy these ASX gold stocks after last week’s crash?

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 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.