S&P/ASX 200 Index (ASX: XJO) gold shares have broadly delivered some strong outperformance over the past 12 months.
The ASX 200 is up 2% since this time last year.
As for the Aussie gold stocks, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller miners outside of ASX 200 gold shares – has leapt 32% over that same period.
Much of that strength has been driven by a rising gold price.
On 13 September 2022, the yellow metal was worth US$1,702 per ounce.
Today, that same ounce is trading for US$1,911, up 12%.
The gold producers have also benefited from a weak Aussie dollar relative to the greenback. Gold is priced in US dollars. But many Australian miners' costs are in Aussie dollars.
At the current exchange rate, gold is trading for AU$2,981 per tonne. That's right about at all-time highs.
With that background in place, here are eight ASX 200 gold shares that could be set to surge.
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Eight discounted ASX 200 gold shares
RBC Capital Markets analyst Alex Barkley says that the big gold miners are working to contain their costs and capital expenditures for the 2024 financial year. This should help them deliver a sound cash flow in the year ahead.
According to Barkley (quoted by The Australian Financial Review):
We also find decent longer-term value, with an average 10% discount to net asset value. A restoration of faith in operational performance, plus a more bullish gold outlook could see improved investor appetite for projects and production growth.
RBC has boosted its medium-term outlook for the gold price by 16%, forecasting a December 2024 price of US$1,960 per ounce.
As for the outlook for ASX 200 gold shares, RBC has an outperform rating on Silver Lake Resources Ltd (ASX: SLR), Regis Resources Ltd (ASX: RRL) and Northern Star Resources Ltd (ASX: NST).
The broker also boosted its target price for five other leading ASX 200 gold shares.
The De Grey Mining Ltd (ASX: DEG) target price was increased to $2.00 a share. That represents a potential 53% upside from the current share price of $1.31.
RBC upped its target price for Evolution Mining Ltd (ASX: EVN) shares by 20% to $3.00. Despite the upgrade, that's still 19% below the current Evolution share price of $3.69.
Gold Road Resources Ltd (ASX: GOR) also got an upgrade from RBC to $1.70 a share. That's a bit over 2% higher than the current share price of $1.66.
RBC's target price for Newcrest Mining Ltd (ASX: NCM) was boosted by 10% to $23.00 a share. That's 12% below the current share price of $25.73.
And the last ASX 200 gold share getting upgraded by RBC is Bellevue Gold Ltd (ASX: BGL). The broker has a target price of $1.90 per share on the gold miner. That represents a potential 32% upside from the current share price of $1.44.
