Why the Northern Star share price is sinking 7% today

The Northern Star Resources Ltd (ASX: NST) share price is under heavy pressure in mid-afternoon trade on Friday.

At the time of writing, shares in the ASX gold miner are down 7.39% to $27.19.

The decline comes despite a very strong run over the past year. Northern Star shares are still up more than 50% over the last 12 months, reflecting a powerful rally in the gold sector.

So, what is pushing the stock lower today?

Gold price pullback weighs on ASX miners

The main driver behind today’s fall appears to be a pullback in gold prices.

Gold is currently trading at around US$5,090 per ounce, after easing in recent sessions following a strong rally earlier this year.

The precious metal has surged sharply over the past 12 months and remains more than 70% higher year-on-year, supported by strong investor demand and geopolitical tensions.

However, gold prices can be volatile in the short-term.

Recent media reports suggest the metal has come under pressure from a stronger US dollar and rising bond yields.

There have also been signs that some investors are taking profits after the metal recently traded near record levels.

This appears to be weighing on Northern Star and other ASX-listed gold stocks today.

Northern Star remains a major gold producer

Northern Star is one of Australia’s largest gold miners.

The company operates a portfolio of major mining operations across Western Australia and Alaska, including the well-known Kalgoorlie Super Pit.

Northern Star reported strong production and earnings growth in its most recent results. This was supported by higher gold prices and steady output from its operations.

The company delivered first-half revenue of $4.31 billion, up 19% year-on-year, while underlying EBITDAincreased 34% to $1.88 billion.

Net profit after tax (NPAT) also rose strongly, reaching $1.11 billion for the half-year.

Northern Star declared an interim dividend of 25 cents per share, reflecting the strong cash generation from its operations.

What could happen next?

While the Northern Star share price is falling today, the broader outlook for the gold sector remains closely tied to movements in the gold price.

Gold often attracts demand during periods of economic uncertainty and geopolitical tension.

Central bank buying has also remained strong in recent years, providing additional support for the market.

If gold prices remain elevated or move higher again, miners such as Northern Star could continue to benefit.

For now, the latest pullback in the gold price is clearly putting pressure on the Northern Star share price.

The post Why the Northern Star share price is sinking 7% today 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.