The ASX gold share sector has flown higher this year, with huge returns delivered.
Of course, recent gains do not guarantee of future returns. But, some analysts are still optimistic that gold stocks can rise further from here. It helps that the gold price continues to rise.
Miners have significant operating leverage. Mining costs typically don't change each year, so any additional revenue is a huge boost for profitability. The gold price recently reached US$4,000 per ounce, which is a huge milestone considering it was under US$3,000 per ounce a year ago.
Broker UBS has a preference for large ASX gold share Newmont Corporation CDI (ASX: NEM).
Let's look at what the broker likes about it.
UBS describes Newmont as one of the largest gold miners in the world, with operations in North America, Latin America, Africa, PNG and Australia. It recently acquired ASX gold miner Newcrest Mining.
What's appealing about this ASX gold share?
UBS said there are three aspects that is appealing about the gold name – steady production, a strong balance sheet and returns.
The broker noted after strong production in the first half of 2025 and continued success with non-core asset divestments, the ASX gold share authorised another US$3 billion for a share buyback.
UBS also said that with net debt well below target, it expects strong cash returns to continue in the second half of 2025.
Why is the sector compelling in the current environment?
The broker explained why the commodity is so appealing right now:
The case for adding gold allocations has become more compelling in this environment of escalating tariff uncertainty, weaker growth, higher inflation and lingering geopolitical risks. The current backdrop wherein global trade, economic and geopolitical relationships may be changing reinforces the need to diversify into safe havens like gold.
In the longer-term, UBS is expecting the gold price to come back down in the next few years, but remain above US$3,000 per ounce. In an upside scenario, UBS' forecast suggests the gold price could grow to US$4,500 per ounce by 2028 and US$5,000 per ounce by 2030. But, it's also possible the gold price could decline.
Price target on Newmont shares
UBS has a buy rating on the ASX gold share, with a price target of $140. Keep in mind, this price target was decided before the latest positive movements for the gold price.
That price target implies a possible 12-month rise of 8% from where it is today.
Current forecasts suggest the business could deliver net profit of US$7.87 billion in FY26, which would be significant.
