Here’s why the Bellevue Gold (ASX:BGL) share price surged 10% today

It was a golden day for Bellevue on the charts.

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rising gold share price represented by a green arrow on piles of gold block

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Shares in ASX gold explorer Bellevue Gold Ltd (ASX: BGL) finished the day on top, climbing 10.6% into the green to close at 94 cents.

Bellevue Gold shares made the leap forward despite no market-sensitive information out of the company’s camp today.

In light of this, why don’t we take a look at what was driving the gains in Bellevue’s share price on Monday.

What’s up with Bellevue Gold shares today?

Whilst there was nothing remarkable from Bellevue’s corner, S&P/ASX All Ordinaries Gold Index (XGD) also posted a solid 2.4% gain today, highlighting strengths across the broad sector.

In fact, the price of the yellow metal has made a sharp upward turn over the past week, bouncing off a low of US$1,736/t.oz on 3 November.

It now trades at US$1,819.94//t.oz at the time of writing, a gain of almost 5% in just a matter of days. As such, the precious metal now commands its highest premium in 3 months.

Strengths in the price of gold bode in well for the Bellevue Gold price. Why is this so you may ask?

It boils down to the fact that Bellevue Gold is an ASX resource share that has direct exposure to gold as an explorer and producer.

As a result, it is considered a price taker on whatever the going spot rate is in the gold markets. Consequently, Bellevue’s share price can and does fluctuate with any volatility in the price of gold.

One unique factor about gold as an investment is that it can be bought 24 hours a day, even if certain markets do close depending on times.

This means the impulse from a jump in the price of gold may not be felt by ASX gold players until the following day.

From 5 November until the end of play today, gold has made another upward move, gaining a further US$27 per troy ounce in that time.

With this in mind, and considering the tight cause-effect relationship between the company’s share price and the volatility of the underlying metal, it starts to make sense of what could be driving Bellevue’s shareholder’s gains today.

This, and the fact that investors appear to be piling into ASX gold shares over the past month, as indicated by strengths in the broad index.

Bellevue Gold share price snapshot

It’s been a difficult 12 months for Bellevue Gold and its share price, having lost 31% in that time after falling a further 16% this year to date.

Each of these results has lagged the S&P/ASX 200 index (ASX: XJO)’s climb of around 20% in that time.

Should you invest $1,000 in Bellevue Gold right now?

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The author Zach Bristow has no positions 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 Bruce Jackson.

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