Why are ASX 200 gold stocks like Northern Star smashing the benchmark on Thursday

S&P/ASX 200 Index (ASX: XJO) gold stocks are shining bright today.

In late morning trade on Thursday, the ASX 200 is up 0.3%.

And the benchmark Aussie index is getting plenty of help from the Aussie gold miners, with the S&P/ASX All Ordinaries Gold Index (ASX: XGD) up 1.7% at this same time.

Here’s how some of the leading ASX 200 gold stocks are tracking today:

• Northern Star Resources Ltd (ASX: NST) shares are up 2.7% at $27.47
• Newmont Corp (ASX: NEM) shares are up 3.1% at $138.42
• Ramelius Resources Ltd (ASX: RMS) shares are up 2.0% at $3.65
• Evolution Mining Ltd (ASX: EVN) shares are up 2.2% at $11.91
• Bellevue Gold Ltd (ASX: BGL) shares are up 2.9% at $1.29
• Perseus Mining Ltd (ASX: PRU) shares are up 2.0% at $5.61
• Vault Minerals Ltd (ASX: VAU) shares are up 558.9% at $4.98*
• Genesis Minerals Ltd (ASX: GMD) shares are up 1.5% at $6.72
• Westgold Resources Ltd (ASX: WGX) shares are up 1.1% at $6.07

(*If Vault Minerals’ 559% intraday share price gains seem extraordinary, well they would be, if not for the 1-for-6.5 stock consolidation taking effect today.)

Here’s what’s rekindling investors’ interest in the big Aussie gold producers.

Why are ASX 200 gold stocks outshining the market today?

The common thread helping lift all the gold miners today is another uplift in the gold price.

The yellow metal is currently trading for US$4,163 per ounce, up 0.8% since this time yesterday.

The gold price is now up 5.9% since the recent lows on 6 November. And investors are betting that bullion – and ASX 200 gold stocks – are likely to get a boost from looming interest rate cuts in the world’s largest economy.

Gold, which pays no yield itself, tends to perform better in low and falling interest rate environments.

And while rate cuts in Australia appear to be off the table for now amid resurgent inflation, the market is increasingly optimistic that the US Federal Reserve will deliver another interest rate reduction in December.

Economists at JPMorgan are among those who now expect the Fed to cut rates in December, pointing to recent dovish comments from Fed members, including John Williams, the president of the Federal Reserve Bank of New York.

In what would come as welcome news to investors in ASX gold stocks, JPMorgan expects the world’s most influential central bank to cut rates by 0.25% in December before delivering a final 0.25% cut in January.

JP Morgans’ chief US economist, Michael Feroli, said (quoted by Bloomberg):

We’re back to looking for a final cut in January. While the next FOMC meeting remains a close call, we now believe the latest round of Fedspeak tilts the odds toward the Committee deciding to cut rates in two weeks from today.

Stay tuned!

The post Why are ASX 200 gold stocks like Northern Star smashing the benchmark on Thursday appeared first on The Motley Fool Australia.

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JPMorgan Chase is an advertising partner of Motley Fool Money. 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 JPMorgan Chase. 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.