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It's not just the ASX's energy stocks that have grown after the Saudi attack that took place this weekend, causing oil prices to skyrocket.
It's not a surprise to see the tastes of the Oil Search Limited (ASX: OSH) course of action and Beach Energy Ltd (ASX: BPT) among the five best performances on the market. S & P / ASX 200 (Index: ^ AXJO) (ASX: XJO), gold stocks are also in full swing, with the precious metal price surging more than 1% to US $ 1,504 an ounce.
The increase is modest compared with the nearly 20% rise in the price of Brent crude after the announcement of the loss of nearly half of its oil production by Saudi Arabia after the drones set fire to production facilities on weekends, but this was enough to allow ASX gold stocks to outperform in the face of speculation that the US was preparing a military response against Iran for the attack.
Gold stocks up
the Newcrest Mining Limited (ASX: NCM) stock price jumped 3.2% to $ 34.59, the Northern Star Resources Ltd (ASX: NST), added share price of 4.6% to $ 10.86 and the Regis Resources Limited (ASX: RRL) gained $ 4.62 per share, up 3.6%.
The price of gold shines bright after US President Donald Trump declares that his country has been "stuck and laden" as he waits for confirmation that Iran was behind the scenes. Coordinated attack.
Trump did not mention the name of Iran, but US Secretary of State Mike Pompeo pointed to the Persian nation even as Houthi rebels in Yemen claimed responsibility for the attack. The United States does not believe that the rebels have the resources to carry out such an operation, while Iran has both the expertise and the motivation to go on strike.
Any escalation of military action will give the Bulls a further reason to raise the price of the yellow metal, which is already rising due to the prospect of interest rate cuts in the United States and in the United States. other countries like Australia.
Other winds of gold
In addition, several central banks, including the European Central Bank, are considering or relaxing their quantitative easing (QE) policy, a tool through which they will buy assets such as bonds and equities to increase the liquidity of the financial system. .
EQ and zero rates during the global financial crisis pushed the price of gold to nearly $ 2,000 an ounce, and although analysts do not expect a new test of these levels, Military strikes from the United States and their allies could easily push gold to over 1,600 US ounces.
Gold producers ASX with local operations will reap even more gains. The price of Australian dollar commodities hit a record high last month due to the weakening of the currency. Growing tensions on a global scale could keep the Australian on track while supporting the price of gold.
This will create a double hurdle for some players in the sector, which could prove more sustainable than the rise in oil prices, given that the US-China trade war (a benefit for the United States) is likely to increase the price of oil. gold and a negative demand for oil) will probably survive any military conflict. .
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Brendon Lau, a contributor to Motley Fool, holds no position in any of the actions mentioned. Connect with him on Twitter @brenlau.
Motley Fool Australia does not own any of the shares mentioned. We fools may not all have the same opinion, but we all agree that taking into account a wide range of ideas makes us better investors. Motley Fool has a disclosure policy. This article contains only general investment tips (under AFSL 400691). Authorized by Scott Phillips.
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