Australian Gold Stocks Trading On The ASX

This guide is part of our comprehensive guide on How To Buy Gold In Australia. We’d recommend checking the guide out in full to better understand gold investments.

Companies that are in the gold production, refinement or exploration industry also stand to benefit from gold price increases and this can translate to increases in their stock price.

Gold Mining Stocks On The ASX

The biggest gold-related companies trading on the ASX are Newcrest Mining (NCM) and KingsGate (KCN). Lihir Gold (LGL) was one of the largest gold miners trading on the ASX until it was acquired by NCM in August 2010 making NCM the 5th largest gold producer in the world.

Troy Resources

Troy Resources made the front page of SMH this week as one of the standout gold miners listed on the ASX with Rod Myer stating that “Over 10 years Troy has delivered share price growth of about 500 per cent.”[1]

How closely do gold mining stocks track the price of gold?

The short answer is; not very well. The problem with gold mining stocks is that they can be subject to “equity market contagion as well as single company risk” according to Drew Corbett from BetaShares.

Over the past few months we’ve seen equities take a hammering. During that period KCN was extremely volatile but has achieved a return close to that of spot gold. NCM on the other hand actually outperformed the S&P/ASX 200 but lagged far behind gold.

Gold Miners Share Price Chart: QAU vs KCN vs NCM vs ASX200 2011

Gold Miners Share Price Chart: QAU vs KCN vs NCM vs ASX200 2011, Source: Google Finance, My Money Calculator


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[1] Dual-listed gold play looks to be heading higher, SMH, August 30th 2011