Australian gold stocks take a hit

The value of Australian gold stocks were slammed yesterday after the price of the commodity hit a five-year low.

The gold price fell to $US1072 yesterday morning before regaining some ground to close at $US1109.

Yesterday’s sharp fall was blamed on heavy selling on the Shanghai Gold Exchange which saw 5 tonnes of gold sold in just two minutes.

However the gold price has been falling for the last month for a variety of reasons including softer Chinese gold demand, the rising US dollar, and a possible US rate rise.

Analysts are bearish gold will be able to make a recovery with Victor Thianpiriya from ANZ stating the value of the precious metal will continue to fall.

"Gold is going to struggle in an environment where you have a rising US dollar and rising interest rates," Thianpiriya said.

Australia's biggest gold miner Newcrest Mining lost 10 per cent to close at $11.87, while Evolution Mining was 14.5 per cent lower, closing at 96c.

Northern Star Resources dived 9.6 per cent to $2.07.

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