Why is the Northern Star share price trading 4% down today?

The Northern Star Resources Ltd (ASX: NST) share price is trading down on Friday.

At the time of writing, shares in the gold miner are pushing nearly 5% lower at $7.33 apiece on no market-sensitive news.

Meanwhile, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is down around 2% on the day.

What’s up with Northern Star shares today?

Whilst it’s been quiet from the company’s camp today, it’s been anything but over in the gold markets.

The gold price dropped to its lowest mark since the onset of the pandemic in April 2020 following a period of heavy downside.

Adding to the pressure this week was higher-than-expected US inflation data that’s kept US Treasury yields buoyant, and the US dollar equally as tight.

The traditional ‘inflation hedge‘, gold has failed to live up to its namesake in light of the latest data. However, there’s a bit more to it than that.

Investors are looking at market expectations along with current performance, and, with higher inflation, comes the prospects of further interest rate hikes, and surging treasury yields.

Alas, both trends in these asset classes are a negative for gold; however, the most recent down-moves were rates-induced, analysts at RJO Futures say.

“Today the biggest factor are yields, [they] seemed pretty strong after taking a little bit of a reprieve,” RJO added.

“This [gold] sell-off into September, October has really been just on rate adjustments…and now they [yields] are right back up again and pushing gold lower,” it finalised.

Given Northen Star’s position as a price taker on the yellow metal, its share price can and does fluctuate in unison with the gold price.

It, therefore, stands to reason that the latest down-leg for Northern Star on the chart has somewhat to do with the recent downside in gold.

Meanwhile, the Northern Star share price is down nearly 23% over the past 12 months to date.

The post Why is the Northern Star share price trading 4% down today? appeared first on The Motley Fool Australia.

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More reading

• Northern Star share price slides 3%: Is it time to load up?
• 5 things to watch on the ASX 200 on Wednesday
• The Northern Star share price has dumped 8% in a month. So what’s the dividend yield right now?
• 5 things to watch on the ASX 200 on Monday
• Do ASX 200 gold shares pay regular dividends?

Motley Fool contributor Zach Bristow 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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