Is the Northern Star share price on the way back up?

The Northern Star Resources Ltd (ASX: NST) share price has risen by more than 17% in the past month.

That makes the S&P/ASX 200 Index (ASX: XJO) gold mining share one of the better performers in the index in the last few weeks.

A key part of the picture for a commodity business is the outlook for the underlying commodity price.

As reported by by one of my colleagues Zach Bristow, the gold price has been rising.

The visit by US House of Representatives Speaker Nancy Pelosi to Taiwan seems to have stirred the pot between Taiwan and China. Pelosi was the highest-level US official to visit Taiwan in 25 years.

Reuters reported the visit could have impacted the price of gold and said “gold prices advanced on Wednesday as the dollar fell and US-China tensions rose”.

However, it was also reported Kinesis Money analyst Rupert Rowling thinks the turbulence may be “short-lived” and that “market focus will return to interest rates and the negative long-term impact that is likely to have on gold”.

Gold expectations

One of the interesting elements about gold is that not only is gold affected by normal supply and demand, but wider economic news can also impact gold prices globally.

Refinitiv Eikon analysis said:

Gold prices rebounded last week after labour market data showed that U.S. jobless claims hit [a] fresh 8 months high, however, anticipation of further rate hikes by the Federal Reserve limited gains.

Gold may hit US$1,650/oz if the Federal Reserve hikes the interest rate as expected.

Can the Northern Star Resources share price go higher?

Plenty of brokers seem to think it can.

A price target is where the broker thinks the share price will be in 12 months.

Ord Minnett rates it as a buy with a price target of $11.10. That suggests a rise of more than 30%. The broker thinks the business is trading at an attractive price to its underlying value.

UBS rates it as a buy, with a price target of $9.80. That’s a rise of 19%. But, the broker likes its potential growth.

The broker Macquarie also rates Northern Star Resources as a buy, with a price target of $10. That would be a rise of around 21%.

The post Is the Northern Star share price on the way back up? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position 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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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