Gold Pullback Creates Entry Opportunity: Can ASX Mining Stocks Bounce Back from 10% Decline?c

Gold’s historic run in 2025 has hit resistance, with prices retreating after briefly breaching the US$4,000 threshold. The correction has weighed on ASX gold miners, many of which fell by over 10% in October. Yet beneath the surface, the drivers of gold’s long-term strength, from central bank demand to geopolitical risk, remain firmly in place. For investors, the question isn’t whether gold has peaked, but whether this dip presents a strategic buying opportunity.

Why Gold Fell: Technical vs Macro Drivers

Gold’s recent dip isn’t due to weak fundamentals; it’s mostly short-term market behaviour:

• Prices surged past US$4,300 in October, sparking a buying frenzy in Singapore and Australia, often a sign of a short-term top.
• The US$4,000 level acted as psychological resistance, prompting profit-taking.
• US interest rate cut expectations have cooled, making gold less attractive than interest-bearing assets.
• A stronger US dollar has made gold more expensive for overseas buyers, especially in India and China.

Despite the pullback, long-term demand remains solid.

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The Case for Gold Remains Strong

Despite recent price dips, gold’s long-term story remains strong. In a shaky global economy, gold continues to act as a safe haven, rising over 25% in 2025 as investors seek protection from inflation and market volatility.

Central banks are still buying. Emerging market institutions have steadily increased their gold reserves, creating a solid demand base that helps support prices even when retail sentiment wavers.

Geopolitical tensions haven’t eased. Conflicts in the Middle East and Eastern Europe, plus ongoing US-China friction, keep gold attractive as a hedge against global instability.

Currency diversification is another driver. Many central banks are shifting away from traditional currencies, boosting gold holdings as part of a broader de-dollarisation trend.

And while inflation has cooled, high government debt and long-term fiscal pressures mean gold’s role as protection against currency risk and financial stress is far from over

Supply and Demand: A Case for Higher Prices

Gold’s supply growth remains limited. Global mine output has flatlined in recent years, with fewer major discoveries and longer development timelines as easy-to-access deposits run dry. Rising production costs have also pushed up the price floor, helping support valuations even during market dips.

Environmental rules and community pushback are adding to the challenge. Permits for new mines take longer, and local opposition has grown, making it harder to ramp up supply quickly.

On the demand side, the picture is strong. Central banks continue to buy, while jewellery demand from India and China stays steady, especially during festivals and weddings. Investment flows through ETFs and physical gold add short-term swings, but the overall trend remains positive thanks to ongoing economic uncertainty.

 

How ASX Gold Stocks Are Positioned

Australian gold miners have felt the sting of the recent pullback, with several stocks sliding more than 10% in October. Genesis Minerals, Evolution Mining, and Ramelius Resources were among the hardest hit, while heavyweights like Northern Star and Newmont also declined. Gold producers dominated the ASX 200’s biggest losers,  a reminder of how tightly mining stocks track the metal’s price.

But beneath the volatility, fundamentals remain strong:

• Northern Star (ASX: NST) reported record free cash flow of A$536 million last quarter, selling 444,000 ounces at an all-in sustaining cost (AISC) of A$2,197.
• Evolution Mining (ASX: EVN) posted even lower costs at A$1,616 per ounce, among the most efficient in the sector.
• Newmont (ASX: NEM) continues to benefit from scale and reserve depth, despite recent price softness.

Key Takeaways for Investors

Gold’s recent dip is driven by technical factors, not weakening fundamentals. Central bank buying, geopolitical tensions, and limited mine supply continue to support prices. Despite volatility, gold remains up sharply year-on-year. For ASX investors, quality producers like Northern Star and Evolution Mining offer strong cash flow and low costs, making them resilient even if prices soften. Pullbacks in mining stocks often present better entry points, and gold’s role as portfolio insurance remains relevant, especially with the added benefit of AUD pricing for local producers.

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