What happened to the Resolute Mining share price?
Shares of Resolute Mining [ASX:RSG] had lost 9.46% today at time of writing, driven by a lower gold price.
Why did these gold stocks drop?
The S&P All Ords Gold Index fell 3.74% today, and has dipped more than 10% since Monday. Last Tuesday, US president Donald Trump addressed the nation to speak about the direction he will be taking the country.
The combination of Trump’s State of the Union address speech and the likelihood that the US Federal Reserve will be raising rates during their next meeting on 14–15 March is driving the gold price down. What is driving this belief that interest rates will rise? The recent labour market tightness, and rising inflation.
US Fed Chair Janet Yellen is expected to speak today to give further indication on the direction the Fed will take.
Resolute mining is not the only one getting crushed today. Most other gold mining stocks, like ST Barbara [ASX: SBM], Evolution Mining [ASX:EVN] and Northern Star [ASX: NST], were also down.
What now for Resolute Mining?
Some are calling the 10% reduction a price correction. Yet gold prices are likely to bounce back with global uncertainty increasing and rising inflation. Remember, even after his speech we still have no clue how Trump is planning to implement his infrastructure plan.
By Selva Freigedo