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Gold Prices Surge Amid Market Turbulence
Recent developments in the gold market have showcased a significant uptick in prices, rising as much as 2.5% this week to reach US$3,528 per ounce. This surge reflects a multitude of concerns, including weakening equity markets, global trade uncertainties, increasing bond yields, and the looming threat of another government shutdown in the United States.
A crucial factor propelling gold prices is the anticipation of the Federal Reserve cutting interest rates in its upcoming meeting this September. The CME’s FedWatch tool indicates an impressive 89.7% probability of a 25 basis point cut this month, with expectations of two reductions by the end of the year.
In a notable shift, foreign central banks are now officially holding more gold than US Treasuries for the first time since 1996, as reported by Bloomberg. This trend suggests a growing global inclination towards gold as a stable currency, distancing from reliance on the US dollar.
ASX Gold Miners: A Shift in Analyst Sentiment
On the Australian Securities Exchange (ASX), Macquarie has altered its large-cap gold recommendations, shifting its preference from Newmont (ASX: NEM) to Northern Star (ASX: NST). The reconsideration comes in light of Northern Star’s attractive valuations and an opportunity presented by its underperformance.
| Ticker | Company | Rating | Target Price |
|---|---|---|---|
| EVN | Evolution Mining | Underperform | $7.00 |
| NEM | Newmont | Neutral | $111.00 |
| NST | Northern Star | Outperform | $24.00 |
The change in recommendation is driven by Northern Star’s stagnant performance since June 2025, compared to Newmont’s impressive 25% increase during the same timeframe. Currently, Northern Star trades at a price-to-net asset value ratio of 1.1, which is more attractive than Newmont’s 1.2 and Evolution’s higher 1.7.
Northern Star’s Growth Potential
Northern Star is expected to deliver the highest five-year average free cash flow yield at 5%, alongside a solid production growth forecast, with FY30 output anticipated to be 54% higher than in FY25. Despite operational setbacks in its FY26 guidance, where gold sales were predicted to underperform expectations, analysts foresee a period of "clear air" ahead as the company looks to gain project approvals for its Hemi initiative in early 2026.
Moreover, Northern Star’s valuation shows it’s trading at only $16,000 per ounce in comparison to Evolution’s $24,000 and Newmont’s $22,000. This contrast persists, given Northern Star’s superior growth trajectory and operational control over significant gold mining assets, including the renowned KCGM super pit.
Opportunities in Mid-Cap Mining Stocks
Among mid-cap gold stocks, Genesis Minerals (ASX: GMD) stands out, following an upgrade in its FY26 guidance. The company’s ambitious growth outlook is matched only by Capricorn Metals, with the potential for more upward revisions in the coming years.
Ramelius Resources (ASX: RMS) presents an appealing turnaround scenario, as it shifts from an 8% free cash flow yield in FY26 to approximately 11% by FY28. This transformation is aided by a reduction in capital expenditure and lessening hedge book pressures.
Reporting Season Insights
The latest reporting season yielded relatively modest results, as many companies had provided guidance during the June quarter. However, some notable capital management efforts emerged:
- Evolution Mining: Matched earnings expectations, announcing a final dividend of 13 cents, culminating in a total of 20 cents per share for the year.
- Northern Star: Delivered in-line earnings with a final dividend of 30 cents, bringing the annual total to 55 cents, surpassing expectations by 8%.
- Bellevue Gold: Reported an underlying EBITDA that exceeded expectations by 17%, yet cited a statutory loss of $46 million due to hedge book closeouts.
- Capricorn Metals: Failed to meet earnings estimates with an 8-10% drop in EBITDA due to rising costs and finance expenses, and no dividend was declared as anticipated.
- Genesis Minerals: Reported in-line results while confirming future growth and mill expansion plans.
- Ramelius Resources: Experienced a 7% earnings miss, though compensated with an unexpected return of a fully franked 5-cent dividend, 75% above anticipated levels.
In a mixed bag of results, West African Resources (ASX: WAF) showcased strong underlying EBITDA performance but faced a trading halt related to government negotiations in Burkina Faso regarding project ownership.
Conclusion
As uncertainty persists in global markets, gold has proven to be a reliable haven for investors. Meanwhile, Australian miners, particularly Northern Star and emerging mid-cap players like Genesis and Ramelius, are illustrating potential for valuable investment opportunities in a shifting landscape.
