The competition between ASX gold shares Northern Star Resources Ltd (ASX: NST) and Newmont Corp (ASX: NEM) has intensified as both companies strive to capitalise on rising gold prices.
With gold hitting another record high of US$2,370 per ounce on Monday, both stocks have seen notable gains in the recent weeks
Northern Star is up 27% year to date, and Newmont – which recently joined the ASX after acquiring Newcrest Mining – is up 42%.
But which of these ASX gold shares offers better value for investors today? Let's see what the experts think. The chart below compares the two stocks this year.
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ASX gold shares have allied in 2024
Gold has surged from lows of US$1,852 per ounce last year to nudge past the US$2,730 per ounce mark, making it one of the best-performing asset classes this year.
As to the rally – central banks have been ramping up their gold purchases this year, seeking diversification and stability amid global economic uncertainties.
At the same time, the price of oil has softened, falling from highs of US$91 per barrel in April to trade at US$73.30/bbl at the time of writing.
This increased demand has cemented gold's status as a 'safe-haven' asset, attracting both institutional and retail investors.
Record high gold prices combined with low input costs (i.e. oil) benefit all gold mining companies, including Northern Star and Newmont.
What are brokers saying?
Brokers are bullish on Northern Star's prospects. Jefferies recently upgraded its rating on the ASX gold share to a buy, setting a price target of $19.50.
Macquarie and Morgans have also issued buy ratings on the stock, highlighting Northern Star's production growth and the impact of its expansion at the Kalgoorlie Consolidated Gold Mines (KCGM).
The company produces approximately 1.6 million ounces of gold annually and has set a target of 2 million ounces by FY26. A higher output at elevated gold prices could be a tailwind.
On the other hand, Newmont has benefited from its huge acquisition of Newcrest Mining, which has boosted its production capacity and expanded its footprint in the Australian market.
Analysts see this acquisition as a strategic move, allowing Newmont to leverage Newcrest's assets amidst a favourable gold price environment.
Macquarie rated the stock a buy in September, setting a price target of $90.
When comparing these two ASX gold shares directly, Northern Star is currently focused on production growth and cost management. This may or may not give it a competitive edge.
Meanwhile, Newmont has expanded its global footprint and diversified its operation, providing stability if gold prices start to wobble. This is especially true with the added assets from Newcrest.
However, with analysts forecasting gold prices to potentially reach US$2,900 per ounce in 2025, both companies could continue to benefit.
Foolish takeout
With gold prices surging and brokers issuing positive outlooks, both Northern Star and Newmont present interesting opportunities.
Yet, if you're deciding between these two ASX gold shares, it comes down to your investment style and individual goals.
Northern Star has risen 43% in the past year, while Newmont has climbed 45%. In that respect, owning both hasn't been a bad option.
