ASX gold shares could be poised to rebound in the new year after a top broker upgraded its forecasts for the sector.
The news could not come at a better time for gold bulls. ASX gold miners are exiting 2021 nursing losses even as the S&P/ASX 200 Index (ASX: XJO) is on track to deliver a respectable 12% gain.
Their woeful performance stands in stark contrast to this time last year. Back then, things were looking promising for the precious metal.
How ASX gold shares performed in 2021
But a sudden jump in US government bond yields and the US dollar took the shine off gold and triggered a sell-off. The Evolution Mining Ltd (ASX: EVN) share price and Northern Star Resources Ltd (ASX: NST) share price slumped into a bear market with losses of 20% or more for 2021.
The Newcrest Mining Ltd (ASX: NCM) share price is faring a bit better with a loss of around 10%, although that's still well behind the rest of the market.
But 2022 could be a more promising year for gold and ASX gold shares, according to Macquarie Group Ltd (ASX: MQG).
Gold on the upgrade path for next year
This isn't to say that there are boom times ahead for gold. If anything, the broker still holds a somewhat negative outlook for the safe haven asset.
"We have upgraded our long-term gold prices by 7% and our long-term silver prices by 5%," said Macquarie.
"Cyclically, our commodities team remains negative on gold, especially as a firm USD is likely to present an additional headwind."
"However, it anticipates gold to bottom at historically elevated levels of around [US]$1,600/oz before embarking on its next upcycle."
Large cap ASX gold shares to buy
Gold is currently trading around US$1,780 an ounce. It's down sharply from its August 2020 price of US$2,075 an ounce, but it appears to have found good support around current levels.
Northern Star is the biggest beneficiary of Macquarie's gold price forecast upgrade among the ASX gold shares it covers. Northern Star's earnings per share (EPS) estimates got boosted by an average of 34% from FY22 to FY26.
This compares to the average upgrades of 15% for Newcrest and 14% for Evolution.
"We continue to prefer NST from the large-cap names, driven by relatively lower-risk production growth vs NCM and EVN," added Macquarie.
Other opportunities among ASX small caps for 2022
Among the smaller cap ASX gold shares, the broker's top picks for their low-cost production growth are the Silver Lake Resources Limited. (ASX: SLR) share price and the Perseus Mining Limited (ASX: PRU) share price.
Gold explorers that are also in Macquarie's good books for their discovery potential include the Bellevue Gold Ltd (ASX: BGL) share price, De Grey Mining Limited (ASX: DEG) share price and Aurelia Metals Ltd (ASX: AMI) share price.
