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Gold's fall drags down Australian miners

Published 20/07/2015, 02:16 pm
© Reuters. Gold's fall drags down Australian miners
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* U.S. dollar gold falls to 5-yr low

* Fall outpaces benefits of a weak Aussie dollar

* Gold miners' index slips to lowest since March

By James Regan

SYDNEY, July 20 (Reuters) - A tumble in the global gold price to the lowest level in a half-decade on Monday knocked down shares of Australian gold miners, as the rapid price fall outweighed support from a firmer U.S. dollar.

The S&P/ASX All Ordinaries Gold index .AXGD index, which tracks listed Australian gold producers, tumbled more than 8 percent to its lowest since March.

Australian-listed gold miners have been supported over the past 36 months by a weakening Australian dollar, which has supported Australian dollar gold prices even as the global price of gold has eased.

"The Australian dollar gold price is falling a lot faster than the Australian dollar and that's what is hurting the gold miners," said David Lennox, a commodities analyst with Fat prophets in Sydney. "It's typically the other way around."

"Now it's a matter of a relative move - just how far the Aussie dollar will fall compared to the U.S. dollar gold price," Lennox said.

Weaker gold prices helped drive Newcrest Mining NCM.AX , Australia's biggest independent listed producer, down more than 8 percent to A$12.09.

Evolution Mining EVN.AX , which has spent hundreds of millions of dollars acquiring new mines this year, was among the hardest hit, falling more than 14 percent to a three-month low of A$0.97.

Northern Star Resources NST.AX , which like Evolution is aiming to boost its ranking to the top of the Australian mining sector by producing more ounces, fell 9 percent to A$2.08.

Perth-based Gold Road Resources GOR.AX was down 9 percent to A$0.36, the lowest since April 28.

Gold XAU= was down 2.4 percent at $1,106.90 an ounce by 0302 GMT after falling as much as 4 percent to a five year low, while the Australian dollar slipped to a new six-year low just above $0.73.

The Australian gold price fell as much as 3.7 percent to its lowest since mid-May before paring losses.

(Editing by Richard Pullin)

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