Why is the De Grey Mining (ASX:DEG) share price higher on Friday?

gold, gold miner, gold discovery, gold nugget, gold price,

The De Grey Mining Limited (ASX: DEG) share price is in the green this afternoon and is now trading 0.83% higher at $1.22.

Shares in the gold exploration company are on the move despite there being no market-sensitive news out of its camp today.

At one point, to start the day, the gold explorer’s shares were in the red, hitting an intraday low of $1.17. They stepped into the money just after 11am, where they have stayed since.

What’s happening with De Grey today?

The De Grey Mining share price is just behind the S&P/ASX All Ordinaries Gold Index (ASX: XGD) today which has climbed 1.05% into the green since the opening of trade.

This indicates there may be strength across the broader ASX gold sector today that may be helping the company’s price action.

The De Grey Mining share price has risen 26% in the past week, leading the ASX Gold index’s gain of 6%.

Also rallying this past week is the price of gold, which has shot up US$30/t.oz since 30 September, hitting a high of US$1,768/t.oz on 4 October.

The recent gains are a reversal of a longer-term downward trend that had been in place since June, where the price of the yellow metal bottomed on 29 September.

As of today it is trading 0.3% higher, commanding US$1,760/t.oz at last check, not far off its recent tops.

De Grey’s industry is in a unique position, in that participants on the supply side must accept prices that are offered in the spot and futures markets on the commodity it is exposed to – gold.

This means the markets dictate what price the company gets for its hard-earned labour. As such, it is considered a price taker, and its share price can and does fluctuate with the price action in the broader gold markets.

Two recent updates appear to have excited investors. De Grey announced a positive scoping study and drill results that indicate a high gold production at two of the company’s sites.

The De Grey Mining share price has shot up 28% from a previous low of 93 cents following the release of both announcements this past week.

De Grey Mining share price snapshot

The company’s shareholders have endured a wave-like journey over the past 12 months. The De Grey Mining share price is down 0.2% in this time. However, it has managed to climb 20% this year to date.

It’s also rallied almost 11% this past month and has risen 26% in the last week, despite today’s selling pressures.

For comparison, the S&P/ASX 200 (ASX: XJO)’s benchmark index has returned around 20% over the past 12 months.

The post Why is the De Grey Mining (ASX:DEG) share price higher on Friday? appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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