The Newcrest Mining Ltd (ASX: NCM) share price was rangebound today and finished trading less than 1% in the green at $19.68.
Newcrest shares have curled up from 52-week lows on 27 July. They have begun to set new high points since, as seen in the chart below.
Image source: Getty Images
Is Newcrest a buy right now?
Those investors doing some bottom fishing in the market would have no doubt stumbled across Newcrest in their searches.
It has been punished in 2022 whilst other commodity giants – particularly in energy – have roared to multi-year highs.
However, Newcrest is a gold story, make no mistake about it. And with gold's pressures of late, the ASX miner's share price has followed suit.
If we extend the chart analysis out a bit further to August 2020, we can see the relationship between both on full display, with some variance in the distribution at various points.
Hence, to understand Newcrest's share price we must therefore have an understanding of the gold price as well.
Gold prices spiked to a 1-month high on Monday, following a pullback in the US dollar and US Treasury yields. The yellow metal now trades at US$1,786 per troy ounce.
Investors are looking to upcoming US inflation data as a signal of where to position in the gold markets, Reuters reports.
"Any surprise softening in the U.S. inflation number could well be the catalyst for a tremendous surge in the gold price," said Clifford Bennett of ACY Securities, cited by Reuters.
On last check, using the federal funds futures market, investors have priced an approximate 65% chance of another 75 basis point rate hike at the US Federal Reserve's September meeting.
Hence, the question becomes if Newcrest presents compelling value, or if we'd be left "catching the falling knife" as the saying goes.
Meanwhile, brokers don't appear to think there's any knife in free fall in the first place. In fact, since July, there's even been 1 broker rotate from a sell to a strong buy on Newcrest.
Now 8 out of 17 analysts covering the share reckon it's a buy right now, up from 7 a month ago, according to Refinitiv Eikon data. The remaining coverage says Newcrest is a hold.
The consensus price target from this list is $25.58, suggesting around 30% return potential if the brokers have it correct.
Newcrest shares are down 22% in the red these past 12 months.
