Macro Intelligence: are Australian gold stocks ready for another breakout?

Spotlight on gold

In this week's edition of IG Macro Intelligence, we examine the recent surge in gold prices and identify key Australian mining stocks positioned to benefit from the precious metal's rally.

Golden run continues

Gold prices have surged 43% over the past 12 months and 27% year-to-date as investors continue to seek safe haven assets amid ongoing geopolitical uncertainty.

Gold reached an all-time high of approximately US$3500 per ounce in April, surpassing the previous inflation-adjusted record of US$3400 set in 1980.

Gold chart

Goldman Sachs analysts remain bullish on the precious metal, citing its appeal as a long-term inflation hedge alongside crude oil. The investment bank maintains a year-end target price of US$3,700 for gold and expects it to breach US$4,000 by mid-2026.

Central bank purchases, coupled with strong private investor demand, are likely to sustain elevated price levels.

Goldman Sachs analysts noted: "Even a small diversification step out of US fixed income or risk assets could cause the next giant leap for gold prices."

Mining opportunities

Newmont (ASX:NEW)

Australian-listed shares of the world's largest gold miner, Newmont Corp, have gained approximately 30% over the past 12 months.

Technical analysis suggests the stock remains in a long-term uptrend, although short-term indicators show some selling pressure according to ASX TradeWatch data.

Newmont Corp daily chart

Analysts maintain an optimistic outlook for Newmont, with the average price target of $94.41 suggesting potential upside of 16% from current levels. The consensus analyst rating is 'Buy', according to Refinitiv data.

David Lane from Ord Minnett commented: "There's significant uncertainty in markets currently, driving continued flows into gold. We see value in several Australian gold mining stocks, with Romulus Resources as our preferred pick, while Newmont represents value on a global scale."

Newmont Corp historical trends and price targets

Evolution Mining (ASX:EVN)

Evolution Mining has delivered exceptional returns with a 135% gain over the past 12 months, significantly outpacing gold's price appreciation.

Evolution Mining daily chart

However, most analysts believe the stock has extended too far, with many suggesting investors hold current positions or reduce their holdings. Morgan Stanley maintains an underweight rating on Evolution Mining, citing elevated valuations at current levels.

Evolution Mining buy/sell indicators and analyst projections

Northern Star (ASX:NST)

Northern Star Resources shares remain in a long-term uptrend according to ASX TradeWatch technical analysis, with the five-day moving average above the 20-day and the 200-day moving average sloping upwards.

Northern Star daily chart

Analysts favour the stock, with the average analyst rating being 'Buy'. Citi analysts expect Northern Star to outperform peers from Q4, once FY26 downgrades are complete and the sale of its 3.4% holding in Gold Road Resources is finalised. Citi maintains a 'Buy' rating with a price target of $22.30, suggesting 8% upside potential.

Northern Star historical trends and price targets

Small-cap considerations

Among smaller players, Firefly Metals shares have risen 46% over the past 12 months. The emerging copper and gold miner is advancing the high-grade Green Bay project in Canada.

Firefly Metals daily chart

Jonathan Tacadena from MPC Markets commented: "I believe the bottom is in for Firefly. It previously traded in the $3 range and is now at $0.90, offering significant upside potential. They have multiple drill rigs operating with substantial news flow expected."

Tacadena also favours Meeka Metals, noting: "The company is transitioning from explorer to producer, with first pour expected in four to five weeks. This milestone should attract more fund manager attention. Trading at a $37 million market capitalisation, I expect significant appreciation once production commences."

Westgold shares have gained 30% over the past 12 months. Michael Wayne from Medallion Financial believes further upside remains: "We believe Westgold can perform well regardless of gold price movements within reason. The company can extract substantial value for investors even if gold prices stabilise or moderate."

Risk considerations

However, caution is warranted with some smaller players. Rumble Resources shares have declined 87% since listing six years ago, despite maintaining a pipeline of advanced exploration projects in base metals, lithium and gold across Western Australia's Tier 1 regions.

MPC Markets' Kai Chen expressed caution: "This is a very early-stage explorer with ultra-high risk. I wouldn't be touching this at the current stage of the cycle. Sometimes commodity markets become overextended, and that's when small caps take off as everyone rushes to buy undervalued assets."

Rumble Resources daily chart