There is no denying that the S&P/ASX 200 Index (ASX: XJO) had a pretty dreadful day of trading on the ASX boards this Tuesday. The ASX 200 ended up finishing the day down 1% after falling as hard as 1.7% earlier in the session. So that makes the Northern Star Resources Ltd (ASX: NST) share price’s performance even more remarkable.
This ASX 200 gold miner ended up having one of the best days it has had for a while today. The company finished the day up a very pleasing 4.63% at $10.16 a share after opening at $9.85 this morning.
So what could be behind this marked outperformance for Northern Star?
Well, to put aside any obvious reasons, there has been no major news or announcements out of the gold miner today. Or indeed this week. Thus, we can only speculate.
But big moves from a mining company are almost always linked to news or price movements of the major commodities they mine. So let’s look at what gold is doing.
Gold mining share Northern Star glitters
Looking at the gold price, we can see it’s actually near its 52-week high. The yellow metal is currently trading slightly over US$1,900 an ounce at US$1,912. It was only at the start of the month that gold was under US$1,800. So we’ve seen a significant appreciation in gold prices over a relatively short time frame.
This can probably be explained by the ongoing Russia-Ukraine crisis that has been dominating world politics recently. Gold is regarded as a ‘safe haven’ asset by many investors. This is due to a number of reasons, including gold’s physical nature and its history as a monetary base.
During times of economic or geopolitical tension, we often see gold rise in value as investors bail out of ‘risky’ assets like shares and into gold and cash. The Ukraine Crisis is a perfect example of global geopolitical stress. So this might be why gold has been on the rise over the past few weeks. My Fool colleague Bernd also looked into gold’s role as a safe haven earlier today.
So we have a rising gold price and increasing uncertainty across the global economy. As such, we can argue that this is why we have seen the Northern Star share price receive so much love during today’s trading session. We saw this playing out across other gold mining shares like Newcrest Mining Ltd (ASX: NCM) today too.
It’s not just today though. Northern Star shares are now up almost 8% in 2022 so far. As well as by more than 22.5% in February alone.
At the current Northern Star share price, this ASX 200 gold miner has a market capitalisation of $11.88 billion, with a dividend yield of 1.87%.
The post Here’s why the Northern Star (ASX:NST) share price had such a stellar day appeared first on The Motley Fool Australia.
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More reading
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- These 3 ASX 200 shares are topping the volume charts on Tuesday
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- Think VAS is the best ASX index fund? These ETFs have beaten it over the past decade…
- ASX 200 (ASX:XJO) midday update: Coles and Cochlear impress, Nanosonics sinks
Motley Fool contributor Sebastian Bowen owns 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 Bruce Jackson.
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