ASX gold shares have had a strong month, and Morgan Stanley thinks investors may have another reason to keep watching the sector.
Aussie gold stocks have jumped 33.9% over the past month, lifting the sector's weight in the S&P/ASX 200 Index (ASX: XJO) to around 6.1%.
The gold price has been doing a lot of the work. Spot gold is trading around US$4,456 an ounce at the time of writing, up almost 10% over the past month.
However, Morgan Stanley says the bigger story for miners could be the amount of cash they are set to generate.
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Plenty more cash ahead
The broker expects the top 10 Australian gold miners to generate significantly more cash through to FY29.
If that plays out, companies could have more room to lift dividends, expand share buybacks, or strengthen their balance sheets.
Of course, a lot will depend on where the gold price goes next.
The market is currently pricing in a fairly big pullback, with consensus forecasts pointing to gold falling towards US$4,000 an ounce by FY29.
Morgan Stanley is more positive than that. Its commodities team expects gold to be around US$4,450 an ounce by late 2026 and believes it could trade above US$5,000 during 2027.
There are also some decent signs on the demand side.
According to The Australian, gold ETFs attracted around 70 tonnes across July and August, reversing the outflows seen in May and June.
Central banks have also stayed active, buying 345 tonnes in the first half of 2026, with China and Poland among the larger buyers.
If that demand holds up and gold prices stay around current levels, the cash flowing through the sector could remain pretty strong.
Northern Star is already returning cash
Northern Star Resources Ltd (ASX: NST) shares are up 0.68% to $23.60 at the time of writing and have gained around 18.6% over the past month.
Its FY26 result showed what a higher gold price can do, with revenue rising 19% to $7.62 billion and underlying EBITDA increasing 22% to $4.27 billion.
Northern Star declared a fully-franked final dividend of 30 cents per share and has also started a $500 million on-market share buyback, with $129 million completed by the FY26 result.
However, the company is still spending heavily, with FY27 capital investment expected to reach $2.55 billion to $2.94 billion as the KCGM expansion ramps up.
Evolution has taken it further
Evolution Mining Ltd (ASX: EVN) shares are up 0.24% to $14.915 and have climbed more than 32% over the past month.
The miner reported record FY26 group cash flow of $1.39 billion, up 76%, and increased its dividend payout target to around 60% of annual group cash flow.
That helped lift its full-year dividend to a record 41 cents per share.
Keep in mind that gold prices can still move quickly, particularly as interest rate expectations change.
But if Morgan Stanley is right, ASX gold miners could have a lot more cash to return to shareholders over the coming years.
