NCM and NST Shares Ride the Second Gold Price Wave

Gold mining giants Newcrest Mining Ltd [ASX:NCM] and Northern Star Resources Ltd [ASX:NST] have seen a resurgence in their share prices thanks to the breakout gold price.

With growing global concerns about a second wave of coronavirus, strength has returned to the price of gold.

NST Share Price Chart


Consequently, stocks in gold miners like NCM and NST have been pushed higher amid renewed demand for the yellow metal.

With the gold price pushing higher in both USD and AUD terms overnight, both stocks have pushed higher today (the gold price in AUD has since retreated -0.07%).

At the time of writing, NCM is up 2.44% to $32.30 per share and NST is up 6.14% to $14.18 per share.

Does a second wave mean a second crash? Implications for NST and NCM

It seems Australia has pretty much got a handle on the coronavirus for now.

With the exception of localities like Melbourne.

And, in all fairness, Australia seems far better protected from a second major outbreak than other developed nations.

But that doesn’t mean we should ignore the possibility.

Countries like Brazil and Chile are still suffering quite badly from the virus.

And there is no guarantee it won’t circle back to major economies like the US.

The economic devastation of the coronavirus lockdowns doesn’t need to be reiterated; most of us have experienced it firsthand.

Yet, if there is a second wave, history tells us it could be more deadly than the first.

For example, the second wave of the Spanish flu in October 1918 was far more deadly than the first wave in March 1918.

Markets appear to be back, humming along — much to the surprise of some economists.

But don’t mistake this for good health.

Discover why forecasting guru Harry Dent is convinced we’re in the ‘the greatest bubble in history’, which could wipe out 40%-plus worth of value from the stock market. Click here for your free report.

Massive amounts of essentially free cash have been dished out to help prop up stock markets, and we’ve witnessed record amounts of new investors.

The rebound in the price of gold could indicate the broader appetite for risky assets is diminishing once again.

Stocks or gold?

Should you be swapping your stocks for gold?

It’s a tricky question to answer.

While gold certainly appears strong at the moment, the physical stuff can demand premiums far higher than the spot price.

That’s why some investors opt to buy shares in gold miners.

If the demand in gold is going to increase, why not own the companies that produce the stuff?

The problem is they can often be tricky to pick.

Before you rush out and buy NCM or NST, be sure to check out our free guide on how to pick winning gold stocks. You can download it here.

Kind regards,

Lachlann Tierney,

The Rum Rebellion


Lachlann Tierney is a writer for The Rum Rebellion and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. 

The Rum Rebellion