Monsters of Rock: Big ASX gold miners have had a good 2023. Can it get better in 2024?

Gold prices near record highs have ASX gold miners up more than 25% this year
ING thinks bullion will hit a new record of US$2100/oz in the fourth quarter of next year
Materials stocks up 1.36% before 4pm AEDT on first trading day post-Christmas

Gold prices are sitting around record highs which, in the laws of ‘what goes up, must come down’, would suggest next year may see some sort of reversion to the mean.

Bullion has, for the past three years, struggled terribly to break through its 2020 highs of US$2075/oz, which has emerged as an impenetrable ceiling unable to be smashed through by war, central bank buying and rising global debt levels.

In the past couple years, they have been kept in check somewhat by a rising interest rate environment in the USA.

But this year, a shift back to gold buying to store wealth, especially by non-Western central banks, has spurred a strong run in prices that has helped Aussie gold miners.

A 1.09% rise today for the ASX All Ords Gold Sub-Index comes after gold entered the Christmas weekend fetching US$2041/oz.

All up, Australia’s big gold miners have seen their collective market cap lift 25.98% year to date, strongly outperforming the ASX 200.

Today’s big winners includes Leonora gold field colleagues Genesis Minerals (ASX:GMD) and Red 5 (RED).

… what we wouldn’t give for the excitement of some merger talk this time of year. We digress.

Will gold stocks continuing on an upward trajectory in 2024?

The bulk of market watchers appear bullish on bullion, which has surged five times over in the past 20 years, notably after the Global Financial Crisis 15-odd years ago.

ING for one, in its most recent commodity update, forecast prices rising to US$2100/oz by the fourth quarter next year.

“We believe gold prices will be supported going into 2024 amid a weaker US dollar on the back of US monetary easing. The risk of tensions escalating in the Middle East should also provide support to the precious metal,” ING head of commodities strategy Warren Patterson and commodities strategist Ewa Manthey said.

“We expect gold prices to hit fresh highs next year and to average $2,100/oz in 4Q, with a 2024 average of $2,031/oz on the assumption that the Fed starts cutting rates in the second quarter of next year, the dollar weakens, safe-haven demand continues amid global economic uncertainty and central bank buying remains at high levels.

“Downside risks revolve around US monetary policy and dollar strength. The higher-for longer narrative could see a stronger dollar for longer and weaker gold prices. Meanwhile, geopolitical instability offers upside risks for the gold market in 2024.”

READ: ASX gold miners smash world’s biggest producers on costs, share price gains

And what of the post-Christmas rally?

Materials stocks meanwhile enjoyed a 1.36% lift as of 3.50pm AEDT on the first trading day of the Christmas break, with a rally in beaten down lithium stocks, other battery metals players and diversified miners helping the ASX resources sector to a big gain.

Mineral Resources (ASX:MIN) rose 2.79%, with South32 (ASX:S32) up 2.78%, Pilbara Minerals (ASX:PLS) up 2.74% and Lynas Rare Earths (ASX:LYC) 2% higher. Among the mid-caps Liontown Resources (ASX:LTR) jumped over 6%.

Iron ore miners were also in the green as prices hovered around a healthy US$140/t, led by high graders Champion Iron (ASX:CIA) and Grange Resources (ASX:GRR), which rose 2.93% and 6.9% respectively.