Attention Northern Star Resources Ltd (ASX: NST) shareholders! Look away now…
Northern Star Resources Share Price
By midday today, shares in the $2.2 billion gold mining company had fallen more than 8%. While no company specific news has been released by the company, two analysts have lowered their expectations for the business.
According to Dow Jones Newswires, Citi analysts cut their price target 2.1% to $4.70 while Macquarie analysts downgraded the company to 'neutral' from 'outperform'.
Another reason behind today's share price fall, which appears more widespread across the gold sector, is the recent fall in the gold price.
Stronger sharemarkets in the wake of the Donald Trump presidency appear to have subdued investors' fears, which is usually a catalyst for higher gold prices. EVOLUTION FPO (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) shares are down 7% and 5%, respectively, at the time of writing.
Foolish Takeaway
Two days ago Northern Star released a promising quarterly report, which reinforced its quality as a gold producer. Unfortunately, gold mining businesses are highly volatile and traded heavily by people with a short-term focus.
If I were going to buy any gold business I would choose either Northern Star or Newcrest, but I prefer to invest in less volatile companies with just as much — if not more — growth potential.
