ASX gold stocks are cooling off after a phenomenal three-month run during which time the commodity price soared from US$2,034 per ounce on 28 February to an all-time high of US$2,449.89 on 21 May.
Since that peak, the gold price has slipped to US$2,302 per ounce at the time of writing. ASX gold stocks have also weakened, with the S&P/ASX All Ordinaries Gold Index (ASX: XGD) falling 7% since 21 May.
Among the biggest ASX gold stocks, Northern Star Resources Ltd (ASX: NST) shares are now 7.4% lower since the gold price peaked and Newmont Corporation CDI (ASX: NEM) shares are 6.5% lower.
Shaw and Partners portfolio manager James Gerrish says a fair bit of profit-taking, along with the falling gold price, has dragged ASX gold stocks lower over the past few weeks.
However, Gerrish and his Market Matters funds management team are still bullish on gold over the long term and decided to hold their overweight position amid the sell-off.
They're now looking for opportunities to buy the dip "as the sector's pullback gathers momentum".
In a recent Market Matters newsletter, Gerrish said:
As medium–term bulls, we are looking at levels to potentially start increasing our exposure to the sector.
Remember, this is a sector that's likely to witness plenty of M&A activity over the coming year.
For example, [in late May], Ramelius Resources Ltd (ASX: RMS) made a play for Westgold Resources Ltd (ASX: WGX).
Gerrish and his Market Matters team say their "ideal roadmap for gold" is the commodity price finding support beneath the US$2,300 per ounce mark.
Here are two gold stocks that Gerrish and his team say are buys when their share prices fall to the right levels.
Bellevue Gold Ltd (ASX: BGL)
This ASX gold stock closed on Tuesday at $1.88, down 5.53% for the day.
The team has a favourable view of Bellevue Gold at about the $1.70 mark, as Gerrish explains:
BGL has advanced over 15% so far in 2024, although recent bond jitters have dampened the performance of the $2.2bn WA-based gold miner.
On [3 June], a 4.8mn block of BGL exchanged hands at $1.93, arguably a good sign that the market still has the appetite for the miner around $2, assuming we don't hear that directors were the sellers, investors wouldn't want another Boss Energy Ltd (ASX: BOE)!
We like the risk/reward towards BGL around $1.70 …
Perseus Mining Ltd (ASX: PRU)
This ASX gold stock closed on Tuesday at $2.33, down 6.05% for the day.
The Market Matters analysts see value in Perseus shares at about $2.15 per share.
Gerrish says:
PRU has really outperformed in 2024, surging almost 30% since January 1st.
This $3.1bn stock looks set to break its $2.50 resistance area once the fear of rising interest rates subsides. It even pays a dividend of around 2%, but investors should be aware that its main revenue stream comes from Africa, which can, at times, increase a stock's volatility.
We like the risk/reward towards PRU around $2.15 …
