Why is the Evolution share price up 13% in a month?

rising gold share price represented by a green arrow on piles of gold blockrising gold share price represented by a green arrow on piles of gold block

The Evolution Mining Ltd (ASX: EVN) share price has been in fine form in the past month.

Since 11 July, the gold miner’s shares have gained 12.65%, making it one of the best performers across the sector.

In retrospect, the Newcrest Mining Ltd (ASX: NCM) share price has fallen by 2.53% across the same timeframe.

At market close, the Evolution Mining share price finished the day taking a slight breather to exchange hands at $2.76, up 1.10%.

What’s driving Evolution Mining shares higher?

The sharp acceleration in the price of gold has boosted investor sentiment leading investors to snap up Evolution Mining shares.

Gold prices recovered lost ground on Wednesday after US consumer price inflation data slowed to an 8.5% yearly rate in July.

This has sparked confidence in the yellow metal as the Federal Reserve could slow down its aggressive rate hikes.

When the US central bank rises interest rates, the price of precious metals gets dragged down. However, investors appear to be positive for the moment which is giving rise to the Evolution Mining share price.

Currently, the price of gold has rebounded toward US$1,785 an ounce, an increase of almost 2% in the past week.

If the Reserve Bank of Australia takes a breather on its monetary tightening policy next month, then Evolution Mining shares could receive another boost.

The company is scheduled to release its full year results for the 2022 financial year on Thursday 18 August.

What do the brokers think?

A number of brokers rated the Evolution Mining share price with different price points in late July.

According to ANZ Share Investing, the team at UBS cut its 12-month price target by 1.7% to $2.90 apiece.

Based on the current share price, this implies an upside of 5% for investors.

On the other hand, Morgan Stanley analysts reduced their rating on Evolution Mining shares by 2.1% to $2.35. Its analysts had a bearish outlook noting that the company’s shares are slightly overvalued for now.

This implies a current downside of 15% from where it trades today.

The post Why is the Evolution share price up 13% in a month? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 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 Scott Phillips.

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