Australian stocks eke out gains as mining shares rally with gold

Omkar Godbole FXStreet Contributor

Australian stocks are flashing green at press time with shares of gold mining companies tracking the yellow metal higher.

The S&P/ASX 200, Australia's benchmark index, is currently trading 0.16% higher on the day at 6,034. Meanwhile, shares in Newcrest Mining are up over 2.5% and AngloGold Ashanti has risen by 8%. Also, Resolute Mining and Evolution Mining have gained 6% and 5%, respectively.

Gold prices rose to new record highs above the September 2011 high of $1,921 on Monday, taking the year-to-date gains above 27%. The metal bottoming out at $1,450 during the coronavirus crash of mid-March and has rallied by over 30% ever since.

And yet the rally in gold may not be the only reason for the uptick in the Australian shares. Additional bullish pressure looks to be emanating from comments made by Reserve Bank of Australia's policymaker Kent that the central bank ready to buy government bonds to support the country's virus-hit economy if market conditions worsen considerably.

Looking forward, stocks may struggle to remain bid due to lingering coronavirus concerns and the US-China tensions. Australia recorded its biggest spike in COVID-19 deaths on Sunday as the second wave of infection sweeps across Victoria, the country's most populous state next to New South Wales, according to Reuters.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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