Shares in Northern Star Resources Ltd (ASX: NST) are on the march today. The gold miner's shares now trade 6.27% higher at $10.76.
The Northern Star share price is unfaltering on Monday despite the wave of macro-economic crosscurrents currently crashing into equity markets around the world.
As investors fly to more quality, less volatile asset classes like gold amid the calamity, gold miners like Northern Star are set to benefit as demand for the yellow metal soars and prices follow.
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Why are Northern Star shares roaring today?
The price of gold has shot up since 30 January from US$1,789 per troy ounce. Gold now trades at US$1,998 per troy ounce.
After trading sideways for the good part of a year around the US$1,800/oz mark, recent geopolitical tensions and a reset of global equity markets has seen investors revel in the rally gold has staged in the past 30 days.
It is now up more than 18% for the past 12 months, and 9% in the past month alone.
Northern Star's share price closely tracks the price of gold (shown below). Northern Star shares are hypersensitive to movements in the precious metal – a common feature among ASX gold mining shares.
In fact, as gold has driven northwards during the past month, Northern Star shares have spiked 26%. That's well ahead of both inflation and the benchmark indices in 2022.
The price of gold itself has charged north with authority in the past two months. This is a sign investors are seeking to hedge out both inflation and what is known as 'systematic risk', the risk of the economic 'system' turning down. Most commonly, this occurs during a recession.
As such, it has staged an impressive rally and now fetches its highest price on record since being de-pegged from the US dollar back in the 1970s.
With the conflict in Europe adding more weight to the selling pressure on traditional equity markets, the stage looks set for gold to continue its popularity as a safe-haven asset.
Given these strengths in the gold markets, the Northern Star share price has a number of sector-specific and macro-economic tailwinds behind it right now. Hence the 6% gain on Monday.
Northern Star share price snapshot
In the last 12 months the Northern Star share price has gained more than 13% and is soaring 14% this year to date.
Prior to the wave of government lockdown directives in 2021, Northern Star had peaked at an all-time high of $16.56 in November 2020.
