It's fair to say that the gold price has been a bit up and down of late.
While concerns over the Middle East conflict have increased demand for safe-haven assets, the prospect of higher for longer interest rates has offset some of this by boosting the US dollar and treasury yields, lessening the appeal for the precious metal.
Where next for gold?
Well, the good news is that the team at Goldman Sachs sees scope for the precious metal to rise from current levels.
A note this week reveals that it expects the gold price to rise ~US$100 an ounce from current levels and then settle at approximately US$1,970 an ounce until 2026.
So with that in mind, which ASX gold shares would be buys with the precious metal trading at these levels? Let's find out.
Which ASX shares are buys with the current gold price?
Goldman Sachs has named four ASX gold shares as buys this week. One is a large cap and the others are all in the mid-cap space.
Starting with the large-cap – Evolution Mining Ltd (ASX: EVN). The broker prefers it to the neutral-rated Northern Star Resources Ltd (ASX: NST) for a number of reasons. It explains:
We prefer EVN (Buy) to NST (Neutral) on near-term FCF, with less concentrated execution risk across its growth pipeline and upside from copper (>20% of revenue on GSe), though factor in Red Lake production below guidance on a soft 1Q. While NST has a strong history of execution/large resource, and an expanded KCGM/asset performance could take production toward ~2Mozpa from FY27-29+, returns look longer dated, with capex spend impacting near-term FCF and leaving valuation less compelling.
As for the mid-cap gold shares, Goldman has named De Grey Mining Limited (ASX: DEG), Gold Road Resources Ltd (ASX: GOR), and Regis Resources Ltd (ASX: RRL) as buys. It said:
Of the mid caps, we prefer GOR, RRL, and DEG (Buy), all at a discount (~0.9x NAV) vs. Australian peers (~1.1x), while CMM's (Neutral) production outlook is positive, though it looks relatively more expensive pre-Mt. Gibson execution.
Goldman has the following price targets on its buy rated gold shares:
- Evolution $4.00
- Regis Resources $1.80
- Gold Road $1.90
- De Grey $1.40.
