ASX gold shares have tumbled since the war in Iran began, with the gold price slumping to nearly US$4,300 per ounce today.
The S&P/ASX All Ords Gold Index (ASX: XGD) has fallen 31% since 28 February, when Israel and the US launched strikes on Iran.
By comparison, the S&P/ASX All Ords Index (ASX: XAO) has fallen nearly 9% amid investors worrying about higher oil and gas prices.
The gold price is now down 13.2% over the past week and down 15.8% over 30 days as the Middle East conflict continues.
For now, concern about a potential resurgence in inflation has overridden gold's traditional safe-haven appeal.
Analysts from Trading Economics explain:
Gold had dropped as much as 25% from its March peak as rising energy prices fueled inflation concerns and bolstered expectations of interest rate hikes.
In a blog, Zaner Precious Metals said the Iran conflict had triggered broad market deleveraging and a stronger US dollar.
This has pushed US Treasury bond yields close to a 10-month high, weakening the appeal of non-yielding precious metals like gold.
Zaner said markets are tilted toward a 'risk-off' temperament, commenting:
That risk aversion is underpinning the dollar, as the trade seeks maximum liquidity.
New expert ratings on ASX gold shares
The market's largest ASX gold share, Northern Star Resources Ltd (ASX: NST) has fallen 42% since 28 February to $17.60 today.
A second guidance downgrade from the miner has contributed to the stock's tumble.
Ord Minnett reckons this one is a buy.
Last week, the broker reiterated its buy rating on Northern Star but slashed its 12-month share price target from $29.70 to $23.70.
JP Morgan downgraded the ASX gold share to a hold rating with a $24 target.
The Evolution Mining Ltd (ASX: EVN) share price has fallen 28% since 28 February to $11.93 on Tuesday.
Ord Minnett upgraded its rating on Evolution shares to a buy last week, with a target of $13.10.
JP Morgan also upgraded Evolution shares to a buy rating with a more ambitious target of $15.50.
Newmont Corporation CDI (ASX: NEM) shares have fallen 22% since the war began to $138.21 at the time of writing.
Ord Minnett has reiterated its buy rating on Newmont share but reduced its target from $215 to $205.
What about mid-caps and small-caps?
Mid-cap ASX gold share, Ramelius Resources Ltd (ASX: RMS) has lost a quarter of its value since 28 February.
Today, Ramelius Resources shares are trading at $3.45 apiece.
Last week, UBS maintained its hold rating on Ramelius Resources shares with a 12-month target of $5.20.
The Greatland Resources Ltd (ASX: GGP) share price has fallen 32% since the war began to $9.35 today.
On The Bull this week, Philippe Bui from Medallion Financial Group put a hold rating on Greatland Resources shares.
Bui said:
Given gold prices remain strong amid company development progressing steadily, GGP is moving closer to becoming a meaningful producer.
Vault Minerals Ltd (ASX: VAU) shares have fallen 38% since 28 February to $3.67 apiece.
Last week, Ord Minnett reiterated its buy rating on Vault Minerals shares with a price target of $7.40.
UBS also retained its buy rating and lifted its target slightly to $7.60.
The post ASX gold shares down 31% since war began: What should you do? appeared first on The Motley Fool Australia.
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