With the gold price again breaching all-time highs, S&P/ASX 200 Index (ASX: XJO) gold stocks could be in for some bumper profits in the year ahead.
This could see shareholders banking larger dividend payouts in 2025. It could also propel ASX 200 gold stocks to further market-beating share price gains.
Especially if the latest gold price forecast from Commonwealth Bank of Australia (ASX: CBA) pans out.
We'll get to that forecast in just a tick.
First, it's worth noting that the yellow metal is currently trading for a record US$2,730.50 per ounce.
That's right around AU$4,102 per ounce. This is an important metric to keep in mind when you're buying ASX 200 gold stocks, as much of these miners' costs are priced in Aussie dollars.
Another important metric to bear in mind is that just one year ago, bullion was trading for US$1,972 per ounce.
With the gold price up 38.5% over 12 months, here's how five leading Aussie gold producers have performed over the past year. A year in which the ASX 200 has returned 20%.
- Northern Star Resources Ltd (ASX: NST) shares are up 44%
- Newmont Corp (ASX: NEM) shares are up 46%*
- Ramelius Resources Ltd (ASX: RMS) shares are up 43%
- Evolution Mining Ltd (ASX: EVN) shares are up 44%
- Perseus Mining Ltd (ASX: PRU) shares are up 75%
(*Note, Newmont shares commenced trading on the ASX on 27 October 2023 after acquiring Newcrest Mining.)
What's been sending bullion to new records?
The gold price has been catching support on numerous fronts.
Central bank easing has been a big driver for bullion in recent months. Particularly the recent 0.50% interest rate cut from the US Federal Reserve, with more rate cuts on the table from the world's most influential central bank.
Gold pays no yield itself and tends to perform better in lower or falling rate environments.
The yellow metal is also priced in US dollars. Lower rates from the Fed should put downward pressure on the greenback and send gold higher. Though, the US dollar has yet to retrace on the latest Fed cut.
The second big factor driving investor interest in gold and helping ASX 200 gold stocks outperform is the metal's classic haven status.
With Ukraine's war with Russia looking to heat up amid the introduction of North Korean troops, and no realistic near-term end in sight to the spiralling conflict in the Middle East, both retail and institutional investors are hunting for a safe place to store some of their wealth.
With that picture in mind, what can investors in ASX 200 gold stocks expect from the gold price in the year ahead?
What is CBA forecasting for the gold price?
According to CBA (courtesy of The Australian Financial Review), the gold price could rise another 10% from current levels to hit an average of US$3,000 per ounce in the fourth quarter of 2025.
That's partly based on the bank's estimate that the US dollar will decline by 2% from today's levels over the remainder of 2024 and then slide another 4% in 2025. CBA is tipping the yellow metal will average US$2,800 per ounce in Q4 2024.
According to CBA's commodities analyst Vivek Dhar:
We see upside risks to our outlook given gold's ability to find support in different financial market conditions so far this year. We have been particularly surprised at the lift in gold prices during periods when the US dollar has strengthened.
Indeed, the gold price is up almost 4% since this time last month, despite a strengthening US dollar over this period.
