Macro Intelligence: gold stocks outperform as precious metal tops US$3000

Written by Juliette Saly

A golden outlook

In this week's edition of IG Macro Intelligence, we take a look at the record high gold price and Australian gold stocks to watch.

Breaking barriers

Gold prices have soared above US$3000 per ounce for the first time in history.

Gold daily chart

The rise in the precious metal has been fueled by global economic uncertainty, a surge in central bank purchases and US President Donald Trump's efforts to reshape global trade through tariffs on both allies and strategic rivals.

Gold is seen as a safe haven in times of uncertainty, with previous psychological benchmarks reached during both the global financial crisis when gold breached US$1000 and the Covid-19 pandemic when the metal broke through the US$2000 an ounce barrier.

Gold inflation-adjusted price char

However, when adjusted for inflation, gold is still a long way from its peak set in 1980, when it hit the equivalent of US$3800 adjusted to today's prices.

Analysts are now scrambling to readjust their current gold forecasts, after the break through US$3000 came faster than expected.

Bank of America gold strategists have suggested investment demand would need to increase by a further 10% for gold to reach US$3500 an ounce, a level they have labelled "not impossible".

Fairmont Equities' Michael Gable agrees: "If you're only looking at gold in the past year or two, it looks like it's gone a long way. And numbers like 3000 feel like that. Maybe it's time to start selling. There are some even more bullish targets closer to 3500 for gold. But if you zoom out and look at the monthly chart, you'll realise that the recent move is still early days. I think the rally in gold has much further to go."

Golden opportunity

M&A activity in the gold sector has been heating up in the past couple of years, after global player Newmont acquired Australia's Newcrest Mining in a deal worth A$26.2 billion in 2023. Newmont CDIs are listed on the ASX under the code NEM and have risen almost 23% since the acquisition.

This week, Ramelius Resources announced it will buy developer Spartan Resources in a deal valuing the smaller player at A$2.4 billion.

Spartan Resources daily chart

Shares in Spartan soared on Monday's announcement, and are up around 200% over the past 12 months.

Gold miners are seeking more supply amid soaring prices, suggesting further consolidation ahead.

Benjamin Yeo from Equion Capital: "Certainly there is a big influencing factor of the geopolitical uncertainty that's going on. And then you add the fact no one really knows what Trump's going to say every single day and what side of the bed he wakes up on. And that creates even more fuel for activity."

All that glistens

When it comes to the world's largest gold miner, analysts are pretty bullish on the outlook for the Australian listed shares.

Newmont buy/sell indicators and analyst projections

Ord Minnett recently upgraded Newmont to a 'buy' from 'accumulate', with a price target of $92.50, suggesting the stock can rally a further 27%.

Ord Minnett has named Newmont its preferred gold stock, along with Capricorn Metals and West African Resources.

Newmont daily chart

Shares have risen around 44% over the past 12 months, with around half those gains coming in the first few months of 2025.

ASX Tradewatch data show shares in a near-term uptrend with investors eyeing further opportunity for gains.

West African Resources historical trends and price targets

Ord Minnett is not alone in its positive outlook for West African Resources, with all four brokers surveyed by Refinitiv suggesting the stock is a 'buy'. The average price target is $3.08, implying it can rally nearly another 40% from current levels.

Evolution Mining historical trends and price targets

The outlook for Evolution Mining shares is a bit less optimistic, with most brokers suggesting you hold at current levels. The average price target according to Refinitiv is a 'hold', with a price target of $5.82, suggesting it can drop 14% from current levels.

This is despite ASX Tradewatch technical analysis which shows the stock is in a strong bullish trend.

Macquarie analysts have a price target of $5.50 with an 'underperform' rating, believing the stock is fully valued at its current levels.

Conversely, Bell Potter has a 'buy' on the stock and a target price of $7, saying Evolution offers unhedged gold and copper exposure via a portfolio of high-quality, long-life assets.

Citi prefers Evolution to Northern Star.

Northern Star buy/sell indicators and analyst projections

The broker has a neutral recommendation on NST, expecting Evolution Mining to keep outperforming the stock given its higher exposure to spot gold and the premium attached to Evolution's copper exposure.

And finally, when it comes to Ramelius all analysts seem in agreement about its longer term potential given the Spartan acquisition.

Ramelius historical trends and price targets

The average target price is a 'buy' with a $2.65 price target according to Refinitiv, suggesting the stock can rally a further 21%.

Rick Squire from Acorn Capital: "I think as the market starts to soften and people start to see where the revenue potential is, they'll actually start to recognise that some of these producers are generating a lot of money. They have very strong balance sheets and there'll be a realisation that there is better value in the gold sector than in other parts of the market."