Is buying ASX gold shares right now a good idea?

The ASX All Ords Gold Index is up 23% since February. Is it too late to buy gold stocks now?

| More on:
gold, gold miner, gold discovery, gold nugget, gold price,

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors who snapped up ASX gold shares on 28 February should be sitting on some outsized gains today.

That's because 27 February marked the beginning of the sizzling run higher for the gold price.

Just what kind of sizzling run are we talking about?

Well, on 27 February gold was trading for US$2,030 per ounce, already well above the US$1,820 that same ounce was fetching on 5 October.

But amid strong central bank buying, the prospect of lower interest rates on the horizon from global central banks, and increased demand for haven assets, the gold price charged higher from there to hit new records on 20 May.

While bullion has retraced a touch from those highs, it's still commanding US$2,336 per ounce today. This sees the yellow metal up 15.1% since the end of February.

As you'd expect, that's been a boon for most ASX gold shares.

Indeed, since market close on 28 February, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) has rocketed 23.0%. For some context the All Ordinaries Index (ASX: XAO) is up 1.4% over this same period.

But with that kind of outperformance already in the bag, is now still a good time to buy ASX gold shares?

Why ASX gold shares could keep shining bright

A range of company-specific factors will determine how well any single ASX gold share will perform over the coming years.

But what happens with the gold price will impact them all.

On that front, UBS has upgraded four ASX gold shares, labelling the Aussie gold sector as "relatively attractive".

As The Australian reports UBS has upgraded its outlook for Northern Star Resources Ltd (ASX: NST), Genesis Minerals Ltd (ASX: GMD), Regis Resources Ltd (ASX: RRL) and SSR Mining Inc (ASX: SSR).

The upgrades come amid the broker's upwardly revised expectations for the gold price.

UBS' analysts have increased their 2025 gold price target by 21% to US$2,700 per ounce. The broker also increased its 2026 price forecast by 34% to US$2,775 per ounce. And UBS' revised 2027 gold price forecast of US$2,600 per ounce is up 30% from the prior forecast.

In Aussie dollars that would see the 2025 gold price at AU$4,053 per ounce.

Taking ASX gold share Northern Star as one example, the miner's March quarterly report revealed it was producing gold at an all-in sustaining cost (AISC) of AU$1,844 per ounce (US$1,213/oz). So we're talking about some hefty potential profit margins here.

Commenting on the upgrades for the ASX gold shares, UBS analysts said:

We have previously flagged some moderate risks around FY 2025 guidance and medium-term cost profiles and have taken the opportunity to update this, but this pales in comparison to the prospect of nearly AU$4,000 per ounce gold.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Gold

An older female ASX investor holds a gangster-style fist pump pose showing off gold rings with dollar signs on them.
Gold

How central banks are primed to drive a new ASX 200 gold stock rally

Global central banks could rekindle the bull run in ASX 200 gold stocks. But how?

Read more »

A woman holds a gold bar in one hand and puts her other hand to her forehead with an apprehensive and concerned expression on her face after watching the Ramelius share price fall today
Gold

Up 29% since February, why is this ASX 200 gold stock tumbling today?

The ASX 200 gold stock is under selling pressure on Wednesday. But why?

Read more »

Two ASX shares investors fighting each other to grab gold treasure.
Gold

As ASX gold stocks cool off, here are 2 to buy when the price is right

Shaw and Partners portfolio manager James Gerrish reveals 2 gold shares to watch amid the sell-off.

Read more »

A woman wearing a gold top and carrying a gold bar gives the thumbs down signal as she leans against a wall with a sombre look on her face as the Kingsgate share price goes lower
Gold

Why are ASX gold shares being trashed on Tuesday?

The sector isn't shining today.

Read more »

A woman in a business suit sits at her desk with gold bars in each hand while she kisses one bar with her eyes closed. Her desk has another three gold bars stacked in front of her. symbolising the rising Northern Star share price
Gold

Is this the very best ASX 200 gold stock to buy now?

Is the best gold miner money can buy right now? Bell Potter appears to believe it could be.

Read more »

Open copper pipes
Gold

Why this jumbo ASX gold stock is targeting a copper pipeline

This massive gold miner seems to be seeing a better future in copper.

Read more »

A woman wearing a top of gold coins and large gold hoop earrings and a heavy gold bracelet stands amid a shower of gold coins with her mouth open wide and an excited look on her face.
Gold

Guess what new trend is taking off amid the soaring gold price

With the gold price soaring to new record highs, an innovative trend is taking off.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Gold

Here's why the Newmont share price is making big ASX news today

Newmont shares just passed a big milestone...

Read more »