The Newcrest Mining Ltd (ASX: NCM) share price has surged in the last month, nearing its 52-week high of $29.27.
Since 20 March, the gold miner's shares have gained around 10.8%, making it one of the best performers across the sector. In comparison, the share price of fellow miner Northern Star Resources Ltd (ASX: NST) increased by 5.8% across the same timeframe.
At the time of writing, Newcrest shares are taking a slight breather to swap hands at $28.77, down 0.24%.
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What's driving the Newcrest share price higher?
It seems the acceleration in the price of gold has boosted investor sentiment. Traditionally, investors flock to the yellow metal as a safe-haven asset when there is uncertainty in the market.
While the world is slowly moving past COVID-19, the war between Russia and Ukraine has sparked a gold rush.
Last month, the price of gold soared above the US$2,000 barrier but has since fallen a touch under. At the time of writing, gold is fetching US$1,946 an ounce.
Compared to 20 March, the precious metal had been priced at around US$1,920. This represents an increase of about 1.3% over the 30-day period.
Accordingly, Newcrest shares have also risen from $25.97 a month ago to today's price of $28.77.
It's worth noting that the price of gold spiked to an all-time high of US$2,072.90 on 7 August 2020. Newcrest shares closed at $33.27 on the day.
You may be wondering why the company's share price is nowhere near the level it was in 2020, given the price of gold is almost the same.
This is because of other macroenvironmental factors, such as the United States Federal Reserve's intent on lifting interest rates this year. It noted that inflation accelerated to 6.9% in the US, the highest rate in nearly four decades.
Following its lead, the Reserve Bank of Australia signalled its move with two expected rate hikes for 2022.
Rising interest rates can drag down the price of precious metals and it appears investors are mixed on these impacts for the moment.
What do the brokers think?
A number of brokers rated the Newcrest share price with different price points in late March.
The team at UBS cut its outlook on the company's shares to "neutral" from "buy". However, the broker raised its 12-month price target by 2.3% to $27.10.
Based on the current share price, this implies a potential downside of 6% for investors.
On the other hand, Morgan Stanley analysts reduced their rating on Newcrest shares by 1% to $33.70. They believe the company's shares still have some room to bounce higher.
This implies a potential upside of 17% from where Newcrest shares trade today.
