The Newcrest Mining Ltd (ASX: NCM) share price has tumbled in the past month as investors head for the exits.
On 19 April, the gold miner’s shares hit a year-to-date high of $28.96, before crashing more than 14%.
At Monday’s market close, Newcrest shares clawed back some ground to finish 0.81% higher at $24.78.
Let’s take a look at what’s driving the recent slump.
What’s triggering the Newcrest share price to sink?
The deceleration in the price of gold has possibly weakened investor sentiment and prompted a sell in the Newcrest shares.
The International Monetary Fund said it expects global economic growth to slow significantly for the remainder of the year.
Current projections expect the world’s economy to expand by 3.6% in 2022, down from 6.1% last year.
In addition, the price of gold has been on a steady decline over the last 30 days to trade at US$1,822.65 per ounce. This represents a decline of around 10% over the above timeframe.
On 18 April, the precious metal almost touched the psychological US$2,000 barrier, before falling wayside.
The drop in the gold price is likely impacting Newcrest’s earnings, which could be driving investors to look elsewhere.
What do the brokers think?
A number of brokers rated the Newcrest share price with different price points following the company’s third-quarter results, announced on April 28.
The team at UBS cut its 12-month price target on Newcrest shares by 2.2% to $26.50. Based on the current share price, this implies a potential upside of 6.9% for investors.
On the other hand, Macquarie analysts reduced their rating by 2.9% but had a bullish price of $33.00. Its analysts believe the company’s shares still have some room to bounce higher. This implies a potential upside of 33.2% from the current price.