At time of writing, St Barbara Ltd’s [ASX:SBM] share price is up a strong 6.3%, now trading at $3.70.
St Barbara is a gold miner and explorer and has assets in Western Australia and Papua New Guinea.
This comes in response to a previous sell off resulting in a 5.8% drop at one point yesterday.
Strong performance for St Barbara
Despite this sell off, St Barbara’s share price has still performed quite well over the past year as seen below:
There are a few crucial reasons why St Barbara has been so volatile recently.
Firstly, a recent production announcement had total production of gold down to 98,547 ounces, compared with 19,436 ounces in the prior quarter this year.
This lead to its earlier drop.
But now for the interesting bit, something to pique your interest.
Gold stocks could profit from market jitters
US 10-year T-bond yields are at sitting at 3.2%, their highest level since 2011.
This surge in bond yields is down to the recent Federal Reserve interest rate hike, and the prospect of more hikes to come.
This has coincided with recent jitters out of Europe, with Italy’s budget blowout.
Italy’s debt to GDP ratio is already high at 130%, and is set to get worse.
An Italian debt default would put the viability of the Euro currency in grave danger.
It would also trigger a truly massive economic crisis.
The risk of this happening could send gold prices into overdrive, something that could only benefit St Barbara.
Keep your eyes on St Barbara over the coming weeks and months.
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PS: 2018 Mining Boom: Could these 10 cheap, top-quality Aussie mining stocks lead this year’s commodities comeback? Find out here.