Why did the De Grey share price leap 5% to a 4-month high today?

The S&P/ASX 200 Index (ASX: XJO) ended up having a stellar start to the trading week during this Monday’s session. At the closing bell, the ASX 200 finished up at 6,964.5 points, a healthy gain of 1.02% over Friday’s close. But the De Grey Mining Limited (ASX: DEG) share price fared even better than that.

De Grey shares finished up at $1.14 each at market close, up a pleasing 5.07% from last Friday’s close of $1.08 per share. This latest rise means the De Grey share price has gained an impressive near-60% from the 52-week low of 72 cents per share that we saw only a few months ago. It also means De Grey is now at its highest share price in four months.

So what caused such an enthusiastic share price gain for De Grey shares this Monday?

What gave the De Grey share price its glitter today?

Well, it seems like it was nothing to do with any ASX announcements out of the company itself, seeing as there were none today. However, last Friday did see ASX broker Macquarie come out with a new outperform rating on the company.

As we covered at the time, Macquarie gave De Grey an optimistic 12-month share price target of $1.65. This was spurred by some good news out last week for the miner’s Mallina gold project in Western Australia.

But we also have another potential catalyst to discuss: the gold price itself.

As a gold miner, De Grey’s fortunes are heavily dependent on what price the yellow metal itself can command.

And, as my Fool colleague James covered this morning, gold has indeed had a positive movement in recent days. As stated this morning, “the spot gold price was up 0.4% to US$1,727.6 an ounce on Friday night. A softening US dollar gave the precious metal a boost”.

So this could be feeding into the stellar gains De Grey shares saw today as well. Other ASX gold shares like Newcrest Mining Ltd (ASX: NCM) and Gold Road Resources Ltd (ASX: GOR) also had positive days today, which adds credence to this hypothesis.

So it’s likely that it’s this mix of rising gold prices, positive developments out of the company and some love from brokers, that has led the De Grey share price to such a rewarding day today.

At the current De Grey Mining share price, this ASX 200 gold share has a market capitalisation of $1.61 billion.

The post Why did the De Grey share price leap 5% to a 4-month high today? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 3 ASX 200 mining shares going great guns on Monday
• Here are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares today
• Why De Grey, Mineral Resources, Nuix, and Yancoal shares are racing higher

Motley Fool contributor Sebastian Bowen has positions in Newcrest Mining Limited. 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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