Gold has surged back above US$4,000 an ounce, triggering a strong rally across Australian precious metals stocks as a weaker US dollar and falling Treasury yields boost demand for bullion.
Gold futures were trading around US$4,074 an ounce after climbing more than 3% overnight, with the move flowing directly into the ASX gold sector.
Evolution Mining rose more than 8%, Newmont gained around 9% and Genesis Minerals jumped more than 11% in morning trade, while Northern Star Resources added almost 6%.
The broader ASX All Ordinaries Gold Index was up close to 9%.
The rally followed a sharp retreat in the US dollar after the midterm election result, while lower bond yields improved the relative appeal of non-yielding assets such as gold.
For Australian producers, the combination of a higher US-dollar gold price and currency movements can significantly improve margins, particularly for companies with established production and relatively stable operating costs.
Attention will now turn to whether bullion can hold above US$4,000 and build another leg higher.
A sustained move at these levels would continue to support cash generation across the Australian gold sector and could renew interest in smaller developers and explorers.
