Australian gold stocks: which ASX gold stocks should you be watching?

Australian gold stocks can be popular markets to trade, offering plenty of opportunity and volatility. But which miners on the ASX should you be watching?

ASX gold stocks overview

Gold has long been an important part of Australia’s economy, ever since the first gold rush back in 1851. The Australian dollar is known as a commodity currency, and gold is a key part of that – it is the country’s fourth-biggest export after iron, coal and gas. In 2021, the country’s gold exports totalled A$17.6 billion.

As a politically stable country, Australia has seen lots of activity from major global miners, including Newmont. But it has a strong domestic sector too, with over 185 gold companies listed on the Australian Securities Exchange (ASX). Those stocks have a combined market cap of A$78 billion.

The vast majority of Australian gold companies, though, are mid to small-cap stocks. Most of the bigger players are located in Canada and the United States, with five of the ‘big 10’ group of top global gold miners based in Canada alone. The top two gold mining companies in the world – Barrick Gold and Newmont – have a combined market cap that dwarves Australia’s entire sector.

That means there is plenty of scope for growth among gold stocks listed on the ASX, but plenty of risk too.

With City Index, you can go long or short on Australian gold stocks – so you can target a profit if you think the industry’s set to falter. Open your trading account to get started.

What moves gold stock prices?

The share prices of gold miners are moved by many factors, including earnings releases, upcoming projects and market sentiment. However, they’re chiefly driven by the price of the raw material they supply: gold.

When gold is worth more, gold miners make bigger profits. So many investors use miners as a proxy for trading gold itself, buying them when the precious metal is valued highly and selling them when it falls.

You can see this relationship play out in the chart above. In 2020, gold’s price rallied as the markets panicked about the widespread impact of Covid-19. Newcrest Mining stock rallied too, in part due to investors using it to take their position on gold. Once the precious metal rally stopped, Newcrest shares began to struggle.

Gold’s recent strong performance has also seen lots of ASX gold companies rise in 2023.

Learn more about what moves the price of gold.

5 of the best gold stocks on the ASX to watch

• Newcrest Mining
• Northern Star Resources
• Evolution Mining
• Perseus Mining
• De Grey Mining

Newcrest Mining stock (ASX: NCM)

Newcrest Mining explores for, mines and sells gold in both Australia and beyond. It is Australia’s biggest gold miner and one of the ‘Big 10’ set of the largest gold companies in the world. It is the only Australian company on the list.

In 2020, Newcrest was the sixth-biggest gold miner in the world by revenue, and seventh by production. It is a member of the ASX 200 (Australia 200 CFD) index of Australia’s most-valuable stocks.

The company has three main areas of operation: Australia, Canada and Papua New Guinea. Its Telfer Mine is expected to become Australia’s largest gold mine.

NCM stock performed strongly in the first few months of 2023, due to a combination of strong results and an attempted acquisition from Newmont, a major US-based gold miner. However, Newcrest’s board rejected a A$24 billion offer in February, stating that it didn’t provide enough value for the business.

That rejection saw the stock’s value fall, but it has recovered since – partially down to an improved A$29.4 billion offer from Newcrest. If it goes ahead, the merger will make Newcrest the world’s biggest gold producer by some distance, well ahead of its rival Barrick Gold.

Northern Star Resources stock (ASX: NST)

Newcrest’s closest rival in terms of market cap is Northern Star Resources, with a value of A$16 billion to NCM’s A$26 billion. Like Newcrest, it has operations in Australia and beyond – in this case, Alaska. It is also a member of the ASX 200.

The company operates nine mines, primarily across three locations:

• Kalgoorlie in Western Australia (WA), which is home to the Carosue Dam, Kanowna Belle, KCGM and Kalgoorlie South operations
• Yandall, also in WA, which is home to the Jundee, Thunderbox and Bronzewing operations
• A single operation in Pogo, Alaska

NST stock struggled off the back of its H1 2023 earnings report in February but has recovered since. As of April 2023, it is above A$14, close to its record high of A$16. It is a dividend-paying stock, which can make it popular among income-targeting investors.

Evolution Mining stock (ASX: EVN)

Evolution Mining is the third-biggest gold producer in Australia by market cap, but it is worth significantly less than its two bigger rivals – with a total value of A$6.5 billion. It is the third and final company on our list to feature on the ASX 200 index.

Evolution announced positive results in its H1 2023 earnings report, but a cut to its dividend saw its share price fall, dropping to A$2.6 by the end of the month. It has recovered since but remains some way off its 2020 high of A$6.

The company runs four mining operations in Australia:  Cowal in New South Wales is its principal mine, alongside Ernest Henry and Mt Rawdon in Queensland and Mungari in WA. It also owns the Red Lake mine in Ontario, Canada.

Perseus Mining stock (ASX: PRU)

Unlike the other companies featured here, Perseus Mining doesn’t mine for Australian gold. Instead, its primary operations are all based in Africa:

• The Edikan mine is located in Ghana
• The Yaouré and Sissingué mines are in Côte d’Ivoire

In addition, it runs gold projects in Côte d’Ivoire and Sudan. It expects the Sudan project to develop into a new mine in the coming years.

PRU stock has performed impressively since 2020, growing from around A$1 up to A$2.4, giving the company the A$3.2 billion valuation it has today. In its last earnings call, it announced record profits of more than A$200 million.

Perseus has a joint listing on the ASX and the Toronto Stock Exchange (TSX).

De Grey Mining stock (ASX: DEG)

Finally, the fifth biggest gold mining stock on the ASX is De Grey, with a market valuation of A$2.5 billion.

De Grey Mining is almost entirely focused on one operation: the Mallina project in Pilbara, Western Australia. A final investment decision on the project isn’t expected until later in the year, but initial prospects look impressive – with a prefeasibility study in 2022 highlighting a potential total of 6.4 million oz of minable gold.

Simon Lill, the chairman of De Grey, has stated that the mine will be an open pit operation, which is lower cost. He has, however, said that there may be a possibility for underground mining as well.

The developments at Mallina have fuelled impressive share price growth for DEG since mid-2022. It has risen almost 100% and currently trades at an all-time high of A$1.6. Rumours of a possible takeover bid from Gold Road Resources have also benefited investors.

Start trading ASX gold stocks

With City Index, you can take your position on gold mining stocks’ price action using CFDs, enabling you to go long or short. Follow these steps to get started:

1. Open your City Index account and add some funds
2. Log in to our award-winning Web Trader platform or download our mobile trading app
3. Search for any of our best ASX gold miners
4. Choose to buy to go long, or sell to go short

Alternatively, you can buy and sell our full selection of stocks – plus indices, forex, commodities and more – with a City Index demo account, which gives you virtual funds to try out trading on live markets with zero risk.