Long gold price rally poised to reshape the ASX’s big indices...

Long gold price rally poised to reshape the ASX’s big indices with several big inclusions.

Evolution Mining isexpected to headline a flurry of changes to the ASX’s biggest indices as goldproducer stocks soar amid investor interest in the precious metal as a havenfrom broader market turmoil.

Evolution, which hasmines around the country, is set to join the S&P/ASX 50 index in the ASX’squarterly rebalance, to be announced next Friday and take effect a fortnightlater. The company’s share price has soared 84 per cent this year, and it willreplace PLS, the lithium producer known until recently as Pilbara Minerals,according to Morgan Stanley analysts.

The broker alsounderlined fellow gold producers Perseus Mining and Genesis Minerals aspotential inclusions into the S&P/ASX 100 index, but assigned a lowerprobability to those changes. Shares in the miners are up 50 per cent and 85per cent this year respectively.

“Typically when companiesget into the ASX 200 or ASX 100, it’s a catalyst for increased passive flows,and we’re seeing across the market that index changes are having a materialimpact on share prices,” said Phillip Hudak, portfolio manager of Australiansmall companies at Maple-Brown Abbott.

Gold miners have beenamong the best-performing stocks on the local bourse this year as investorsseek a haven amid the chaos unleashed by US President Donald Trump’s aggressivetrade policies. That has lifted gold prices more than a quarter this year to record levels.

The huge moves in goldstocks influenced the ASX’s latest rebalance in March, with Spartan Resourcesjoining the S&P/ASX 200 index, while Catalyst Metals, Ora Banda and Pantoroall joined the S&P/ASX 300 index.

Still, the growinginfluence of gold companies is most evident in the smaller end of thesharemarket given they have typically outperformed their larger counterparts.Gold stocks accounted for nearly 17 per cent of the S&P/ASX SmallOrdinaries Index last month, up from 6 per cent in previous years.

“Many of the small capshave been growing production in an environment where they’ve been able tomanage costs, so with the gold price where it is, there’s significant positivenews coming through,” Hudak said.