ASX Gold Stocks Surge on Fed Rate Cut: Buy ASX Miners or Take Profits?

ASX Gold Stocks: Profits Surge After Fed Rate Cut

Gold surged past US$4,300 per ounce on Friday, testing the record highs reached in October, after the US Federal Reserve delivered its third rate cut of 2025. The 25 basis point reduction brought rates to 3.5-3.75 per cent, their lowest level in three years. For ASX gold miners, the move has reignited momentum, with Northern Star (ASX: NST) and Regis Resources (ASX: RRL) both rallying strongly this week. With gold already up more than 64 per cent this year, we believe the easy gains are likely behind us, but for patient investors willing to ride out short-term volatility, the long-term outlook for gold still looks strong.

What are the Best ASX Gold stocks to invest in right now?

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Why Gold Loves Rate Cuts-  And Why This Time May Be Different

Lower interest rates usually help gold because they make it less costly to hold an asset that doesn’t pay interest. With the Fed making it clear that rate hikes are off the table and traders expecting two more cuts in 2026, the overall environment looks good for gold.

Central bank buying continues to provide structural support. China’s central bank has added to its gold reserves for 13 consecutive months, and global central banks are on track to purchase around 1,000 tonnes of gold in 2025, their fourth consecutive year of massive accumulation. In our view, this sustained institutional demand provides a floor under prices that short-term volatility cannot easily shake.

That said, much of the December rate cut was already priced in. Markets had assigned a 90 per cent probability to the move, which explains why gold initially dipped before recovering. We believe the risk of a “buy the rumour, sell the news” pullback remains elevated after such a powerful rally. While the long-term trajectory looks positive, a short-term correction would not surprise us.

Three ASX Gold Stocks to Watch

Northern Star (ASX: NST) is Australia’s largest gold producer and offers the safest exposure to the sector. The stock has risen roughly 70 per cent over the past year, trading around A$26, with a market capitalisation exceeding A$25 billion. Northern Star holds approximately A$1.5 billion in cash and bullion, providing significant financial flexibility. With all-in sustaining costs around A$2,163 per ounce, it generates strong margins at current gold prices. In our view, Northern Star remains the obvious choice for investors seeking large-cap stability with growth potential.

Regis Resources (ASX: RRL) has been the standout performer, surging nearly 185 per cent over the past year to around A$7.30. The company holds a record cash balance exceeding A$500 million and generated A$149 million in cash during the last quarter alone. Regis offers a cheaper entry point than Northern Star and potentially higher leverage to gold price gains, though it carries more operational risk given its smaller scale and ongoing debt reduction.

Bellevue Gold (ASX: BGL) represents the higher-risk, higher-reward option. The stock has underperformed this year due to operational challenges and hedging contracts that locked in lower prices. However, Bellevue operates one of Australia’s highest-grade gold deposits at 9.9 grams per tonne. If management delivers on its production guidance of 150,000 ounces in FY26 and 190,000 ounces from FY27, the current share price around A$1.20 could look attractive in hindsight.

Buy, Hold, or Take Profits?

For growth investors with a two-to-three-year horizon, we believe the bull case remains compelling. Goldman Sachs and other major banks forecast gold could reach US$5,000 by 2026-2028, supported by ongoing central bank purchases, geopolitical tensions, and continued monetary easing.

However, after a 64 per cent rally, some caution is warranted. A pullback to US$4,000-4,100 would represent a normal correction within an ongoing bull market. Currency movements also matter; a stronger Australian dollar would compress margins for local producers, while a weaker Aussie amplifies gold price gains.

The bottom line: For most investors, a balanced approach makes sense. We would hold existing positions but wait for a pullback before adding significantly. If gold holds above US$4,200, buyers remain in control. A sustained break below US$4,100 could signal deeper consolidation before the next stage of gains.