The increasing scale and strength of Australian gold stocks has attracted a swathe of US investors to the sector over the past 18 months, with the company's chief executives tipping the run to continue.
The bulk of ASX listed mid-tier gold producers have seen an increase in the percentage of their register held by North American investors over the past 12 to 18 months.
In the year to June 30 Newcrest Mining said its North American holding jumped 5 per cent to about 38 per cent.
The chunk of mid-tier player Saracen Mineral Holdings' register held by US investors has increased to about 22 per cent from about 9 per cent over the past 12 months while Evolution Mining's has jumped from about 15 per cent to about 26 per cent and St Barbara has recorded an increase from 15 per cent to 35 per cent.
And the buying is continuing.
Global Mining Research managing director David Radclyffe said based on the positioning of more than 20 top global gold funds, the weighted average holding to Australia had increased to 10.1 per cent from about 8.8 per cent at the end of March.
Mr Radclyffe said the move was "driven by the outperformance of Australian gold companies and buying in Australian equities such as Newcrest", with Newcrest among the top additions across the funds over the past three months.
The VanEck Vectors Gold Miners ETF, the world's largest global gold equities ETF, had a weighted holding to Australia of 12 per cent as at the end of August. One of the largest shareholders in nine ASX-listed gold companies, it increased its holdings this week in Northern Star Resources, St Barbara, Resolute Mining and Newcrest.
Finding value
Speaking from the Denver Gold Forum in Colorado on Wednesday, Resolute Mining managing director John Welborn said a strong Australian presence at the major conference was being noted by US investors.
"Australian companies have always come to this conference to market to the US investor, it is just that previously we haven't been noticed or we have been on the edges," Mr Welborn said.
"But this year if you are a US investor you are trying to find value. Everything has gone up a lot, the North American [miners] look pretty expensive on their metrics and all of the Australian guys are presenting good production bases, good costs and suddenly everyone wants a meeting because suddenly the sector represents an attractive destination for funds."
Doray Minerals managing director Allan Kelly said he had been in back-to-back meetings for much of the conference.
"The Australians are still trading on cheaper valuations than most of the Canadian companies so I think one of the key messages has been how much good value there is in the Aussie sector at the moment," he said.
Mr Kelly said he believed the run would continue while that value remained.
However, Metals X chief Peter Cook said he believed most of the rebalance to international holders had taken place and the shift had come with its setbacks.
"We can bask in the sun while it is here but it will be brutal on the way down as well because when they reweight they unrelentingly sell into the market," he said.
Mr Cook said the funds also created a great deal of share-price volatility because they shadowed the movement of the US dollar gold price.
"Gold ETFs and gold index funds possibly now control the up and downward movements in Aussie gold share prices," Mr Cook said.
He said if the US dollar gold price dropped overnight but currency movements resulted in Australian dollar gold remaining flat or increasing, Australian gold shares would still drop in parallel with the US dollar price.
"Despite the Australian dollar gold price being sideways for the last six months, and the small movements having no material impact on how any Aussie miner would run or operate its business, the volatility in shares prices is massive."
