Mining stocks absolutely carried the S&P/ASX 200 Index (ASX: XJO) last year.
And even though western economies are struggling, China's post-COVID resurgence has many experts betting that there will be renewed thirst for raw materials.
Fairmont Equities managing director Michael Gable this week picked out two ASX shares in the resources sector that would make handsome buys at the moment:
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Now is the buying opportunity for metals producer
The South32 Ltd (ASX: S32) share price has fallen almost 15% since 3 March.
"In our view, this can be considered a buying opportunity for this diversified mining company trading at a discount," Gable told The Bull.
He's not the only one thinking along those lines. According to CMC Markets, ten out of 19 analysts are currently rating South32 as a strong buy.
The analysts at Citi were certainly pleased with what they saw over reporting season.
"1H FY23 profit of US$560 million was better than expected," reported The Motley Fool's James Mickleboro.
"Importantly, FY23 production and cost guidance was maintained. FY24 production guidance points to modestly higher output in FY24."
In rating South32 as a buy, the Citi team predicted that it has plenty of upside to come.
"We believe S32 has not yet run to full valuation levels trading on FY24E EV/EBITDA of 4x vs peers at >5x."
Gable points to the upside in commodity prices forecast for the rest of this year.
"Low inventories in base metals should lead to a spike in prices," he said.
"We expect increasing demand for base metals in later 2023."
Gold will conquer the world
Gold is considered a safe haven asset for troubled times, and that's no different in 2023 for Gable.
"We've been positive on gold stocks for the past few months, and still believe Newcrest Mining Ltd (ASX: NCM) is a buy at current levels."
Newcrest shares have rocketed in sync with gold prices, with the stock gaining more than 62% since late September.
Gable likes the momentum.
"The share price has been trending higher since September 2022 and we expect it to continue moving forward," he said.
"Any fall in the US dollar will be positive for gold prices."
Another catalyst could come in the form of an acquisition.
"Potential exists for a new takeover bid after Newcrest rejected an offer from Newmont Corporation (NYSE: NEM) in February."
The team at Firetrail is also a fan, last month nominating Newcrest shares as a stock to hold for the next decade.
They believe that the US dollar will lose its status as the world's reserve currency, thus pushing gold into prominence.
"Gold was the world's reserve currency for 5,000 years. It was only usurped by the US dollar 40 years ago following the breakdown of the gold standard," Firetrail analysts said in a memo to clients.
"A greater role in world finance will put upward pressure on the gold price to the benefit [of] low cost, long life gold miners such as Newcrest Mining."
