Gold Digger: Big banks lift forecasts as bullion heater breaks $2500/oz

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• Sprott, banks, lift gold price futures after breaking US$2500/oz barrier
• CommBank lifts its 2025 gold price forecast to US$2600/oz
• Northern Star and Regis post record earnings

Our Gold Digger column wraps all the news driving ASX stocks with exposure to precious metals.

Gold stormed past the significant US$2500/oz milestone on Wednesday, hitting $US2,513/oz, with banks and analysts becoming more bullish about a rise in prices as WA gold miners post record earnings.

What Sprott says

CFA market strategist Paul Wong says at the start of the year, gold bullion had one of the most bullish high-conviction charts he’d seen in a long time, with clear bullish patterns in the broad and micro pattern structures.

“This week’s calculations indicate this is continuing. My best guess remains central banks or sovereigns, but it is unlikely China,” Wong says.

“In January, I wrote that the good news was gold would do very well in 2024, but the bad news was that we might not know precisely why, beyond “central banks and sovereigns”.

“This appears to be another buying leg that is not explained by the usual market variables (currencies, yields, curves, spreads, CFTC1 & ETFs, etc),” he added.

“We believe gold will likely go higher, with signs that the supply of “free-floating available gold held inventory” is drying up quickly (i.e., significant size sellers are nearly gone).”

What the banks say

CommBank agrees, lifting its 2025 price forecast to US$2600/oz – and potentially even higher if the US delivers rate cuts and avoids a recession.

“This soft-landing narrative for the US economy will be closely scrutinised with every US labour, inflation and economic data release,” CommBank’s Vivek Dhar says.

ANZ has lifted its own year-end price target to US$2550/oz as India and Turkey increase purchases of bullion and elevated geolpolitical risks suggest buying will continue.

“Structural gold demand in India looks strong due to the increasing affluence expected in the coming years,” the bank says.

Since India’s gold demand is largely driven by physical demand, particularly for jewellery, rising per capita income will be a driver in the long-term.”

Winners & Losers

Here’s how ASX-listed precious metals stocks are performing:

Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop or PC.

Stocks missing from this list? Email [email protected]

Top ASX gold stories this week

Reporting season is here and a couple of WA bigwigs in the gold scene are up and at it.

$17bn Northern Star Resources (ASX:NST) delivered a record $1.81bn in earnings and revenue of $4.9bn yesterday, with an underlying EBITDA of $2.2bn, relatively in line with Goldman Sachs’ predictions.

That’s a 43% increase YoY, supported by a stronger realised gold price and an underlying EBITDA margin of 45% (up from 37% in FY23).

A final dividend of 25c/sh was declared for full-year dividends of 40c/sh at the mid-point of the target payout of cash earnings.
“We expect a growing net cash position to support increased returns, where NST noted that future dividends will grow naturally as growth projects/earnings ramp up, while also remaining open to special dividends,” says Sachs.

The investment banker also says it sees further upside for mid-cap Regis Resources (ASX:RRL) delivering on its production targets of 335-400Koz+ in FY27 by growing near-term yields.

“We expect RRL to move to a comfortable net cash position by the end of FY25 (from modest net debt at FY24), which, with a reduced capex profile without the McPhillamys project, sees room to return to dividend payouts over the next ~12 months (with franked payouts from FY26).”

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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