S&P/ASX 200 Index (ASX: XJO) gold stocks have been enjoying some heady tailwinds from a fast-rising gold price.
And the stars look to be aligning for the yellow metal to keep pushing higher.
Gold is currently trading for US$2,501.70 per ounce, just off Friday's all-time highs of US$2,509.65 per ounce.
At current prices, bullion is up 37.4% since 5 October, when that same ounce was worth US$1,820.30. And as recently as 14 February gold was trading for just US$1,992.33 per ounce.
As you'd expect, this has been good news for investors in ASX 200 gold stocks.
Here's how some of the big Aussie gold miners have performed over the past 12 months:
- Northern Star Resources Ltd (ASX: NST) shares are up 42.6%
- Newmont Corp (ASX: NEM) shares are up 27.6%*
- Ramelius Resources Ltd(ASX: RMS) shares are up 70.3%
- Gold Road Resources Ltd (ASX: GOR) shares are up 21.7%
- Evolution Mining Ltd (ASX: EVN) shares are up 27.0%
- Perseus Mining Ltd (ASX: PRU) shares are up 54.8%
(*Note, Newmont figures are as of 27 October, when the miner first listed on the ASX after acquiring ASX listed Newcrest Mining.)
Taking a look at the bigger pack of Aussie gold miners, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller gold stocks outside of the ASX 200 – has gained 32.9% since this time last year.
Yet even with these outsized gains already in the bank, there are good reasons to expect more outperformance from the top miners.
Stars aligning for ASX 200 gold stocks
The gold price has been catching tailwinds on three major fronts over the past year.
First is gold's safe-haven status, which sees demand rising when economic or political uncertainty rises. And there's certainly plenty of uncertainty brewing across the globe.
Gold, and ASX 200 gold stocks, have also gotten support from ongoing robust demand from central banks.
According to Bloomberg calculations, based on data from Metals Focus, central bank net gold purchases in the first half of 2024 came out at 483.3 tons — or some 40,000 gold bars, which normally weigh 400 ounces each.
And central banks have done well in stocking up on bullion. With the gold price soaring to new records, a single gold bar is now worth US$1 million for the first time.
The third big factor supporting the gold price and helping boost ASX 200 gold stocks is consensus expectations that the US Federal Reserve is set to deliver a series of interest rate cuts.
Gold doesn't pay any interest itself and tends to perform better in low or falling rate environments.
Another leg up for gold
Commenting on the outlook for the gold price in 2025, ANZ Group Holdings Ltd (ASX: ANZ) senior commodity strategist Daniel Hynes said (quoted by The Australian Financial Review), "There are certainly more tailwinds in the next year or so. I wouldn't be surprised to see it above US$2,600 this year."
Hynes noted that the gold price rose an average of 6% at the beginning of the Fed's last four easing cycles, and it has tended to keep climbing during those cycles.
So, if the Fed opts to cut by a full 0.50% at its next meeting on 18 September, ASX 200 gold stocks — including Northern Star, Newmont and Evolution — could be some of the bigger beneficiaries.
