ASX gold miners face scrutiny amid record gold prices

Golden run

The price of gold continues to soar, reaching above US$4000 an ounce for the first time.

Gold has surged 49% this year, building on a 27% gain in 2024, driven by strong central bank purchases, renewed inflows into gold-backed exchange-traded funds (ETFs), a softer United States (US) dollar, and heightened retail demand as investors seek protection amid escalating trade and geopolitical tensions.

The US government shutdown is adding to gold's bullish momentum, with the metal topping US$4000 an ounce; doubling its value in less than two years.

Spot gold in USD per ounce chart 

Losing their shine?

Bank of America is sounding caution on gold's run, suggesting the precious metal itself has achieved much of its upside potential and now appears slightly overbought. Could gold stocks be set to lose some of their shine?

The Australian gold sub-index is up close to 100% over the past 12 months, hitting a record earlier this week, compared to a gain of around 10% on the broader S&P/ASX 200.

S&P/ASX 200 gold chart

Morningstar analysts have raised their near-term gold price assumptions but note that ASX-listed gold miners such as Newcrest Mining and Northern Star Resources are 'materially overvalued'. Analysts expect gold to return to long-term fundamentals despite the bullish short-term outlook.

Evolution Mining (ASX:EVN)

Shares in Evolution Mining have soared close to 150% over the past 12 months.

Evolution Mining daily candlestick chart

Morningstar analysts have raised their fair value estimate on the stock by 5% to $4 despite stating in August that shares were too expensive at $3.80 due to elevated gold prices.

Evolution Mining buy/sell indicators and analyst projections

Overall, analysts believe its stellar run may be nearing an end, with Morgan Stanley underweight on the stock, having a $5.60 price target that suggests it could drop 50% from here. Meanwhile, the average recommendation on Evolution Mining is $8.37, according to Refinitiv data, suggesting a drop of around 25%.

However, ASX Tradewatch data indicates further upside potential, with multiple indicators suggesting a bullish upward trend on both short-term and longer-term horizons. Notably, the 200-day moving average is trending higher.

Evolution Mining historical trends and price targets

Northern Star Resources (ASX:NST)

Shares in Northern Star Resources have not performed as well as Evolution Mining but are up close to 60% over the past year.

Northern Star Resources daily candlestick chart

Morningstar analysts have also increased their price target on this stock by 5% to $13.70. Technical data show the 5-day moving average above both the 20 and 50-day moving averages, indicating a bullish uptrend. 

Northern Star Resources historical trends and price targets

Macquarie has an 'outperform' rating on the stock, with a $27 price target suggesting a further 9% rally, while the average recommendation on the stock is a 'buy'.

Macquarie has lifted its earnings per share (EPS) forecast for Northern Star by 36% for financial year (FY) 2025 and 59% for FY 2026 due to its overweight call on gold, increasing its target price on the stock to $27 from $24.

Northern Star Resources buy/sell indicators and analyst projections

Perseus Mining (ASX:PRU)

Finally, Morningstar has increased its price target on Perseus Mining by 6%. 

Perseus Mining daily candlestick chart

ASX Tradewatch data indicate shares are in a strong bullish trend, confirmed by multiple indicators, while the average broker recommendation on the stock is a 'hold' with a $4.97 price target according to Refinitiv.

Perseus Mining historical trends and price targets