ASX gold shares. They're arguably the hottest thing on the market right now except for maybe tech shares. One of those leading the pack is Northern Star Resources Ltd (ASX: NST). In fact, the Northern Star share price has surged 20.8% in the last month.
So, how does Northern Star compare to its peers and is it still in the buy zone?
Why the Northern Star share price has gone up
One huge factor has been the bearishness in global share markets.
Investors have been on edge ever since the March bear market. While the S&P/ASX 200 Index (ASX: XJO) has bounced back strongly, there are still lingering concerns.
Those fears have been heightened amid the Victorian lockdown and the looming August earnings season.
That has pushed global gold prices to a new record high and the Northern Star share price has climbed with it.
In fact, ASX gold shares are continuing to climb. Low-interest rates and a weakening US dollar are continuing to fuel demand with a potentially bullish outlook ahead.
How does Northern Star compare to its peers?
Let's take a look at the numbers and see if there's any relative value in the Northern Star share price.
Northern Star trades at a price-to-earnings (P/E) ratio of 53.5 with a market capitalisation of $12.2 billion.
On first glance, that looks to be quite expensive for an ASX gold share.
The Saracen Mineral Holdings Limited (ASX: SAR) share price has also been outperforming. In fact, Saracen shares have rocketed 81.3% higher this year to a market capitalisation of $6.6 billion.
Saracen shares trade at a P/E ratio of 44.9, while St Barbara Ltd (ASX: SBM) shares have a lower 21.2 multiple.
One thing to keep in mind is the huge resources that both Northern Star and Saracen have to work with. That includes the joint ownership of the Kalgoorlie Super Pit gold mine which has massively boosted production.
Foolish takeaway
Despite how bullish the market is on ASX gold shares, I don't think the Northern Star share price is a buy.
There's no sign of inflation in the short-term which could hamper global gold prices' future growth. While market volatility may continue, I'm not sure gold will continue to surge.
Add to that a relatively expensive P/E ratio and I don't think it's a compelling buy in the current market.
