Shares of gold mining companies have soared in the early months of 2025, outpacing gains in the price of gold itself as inflationary pressures and geopolitical uncertainties drive heightened investor interest in precious metal-linked assets.
The VanEck Gold Miners ETF, a $14 billion fund that tracks major gold mining stocks, has climbed 20% year-to-date with 52 of its 56 holdings posting gains. By comparison, gold prices have risen 12% over the same period while the broader S&P 500 index has edged up just 1.7%.
For years, gold mining stocks have lagged behind gold prices, reflecting operational challenges, production costs, and market volatility.
However, the current surge suggests that investors are increasingly turning to mining equities as an alternative to direct bullion purchases.
“From 2014 till now, gold equities have underperformed pretty drastically,” said Steven Schoffstall, director of ETF product management at Sprott Asset Management. “We do think that there is a sustained period here for gold and silver.”
Several mining stocks have delivered remarkable gains, reinforcing this renewed interest. Newmont Corp., the largest publicly traded gold miner in North America, has surged 18%, making it the top-performing stock in the S&P 500 Materials Index.
SSR Mining Inc., a Canadian-based miner, has seen its stock jump 50%, contributing to the strong performance of precious metals equities on the TSX Composite Index.
Strategists at Goldman Sachs have raised their gold price target to $3,100 per ounce, citing rising central bank purchases and global economic uncertainty.
Among the largest institutional buyers is the People’s Bank of China, which expanded its gold reserves for a third consecutive month in January.
JPMorgan Chase & Co. analyst Bill Peterson pointed to growing economic uncertainty, noting that U.S. tariffs on China, Mexico, and Canada could further disrupt supply chains, fueling demand for gold as a hedge against inflation and geopolitical risk.
Meanwhile, a Bank of America survey of global fund managers ranked gold as the second-best performing asset class for 2025, trailing only international equities.
Growing interest in gold mining stocks has also led to the launch of new exchange-traded funds (ETFs). Toronto-based Sprott Asset Management LP recently introduced an actively managed gold and silver miners ETF, which has seen strong inflows from retail investors.
This follows the January debut of a passively managed silver miners ETF, further underscoring investor appetite for precious metal equities.
Despite the bullish momentum, analysts caution that gold prices could retreat if U.S. inflation cools, reducing demand for inflation-hedging assets. A potential easing of geopolitical tensions could lower the appeal of safe-haven investments while tariffs imposed by the U.S. could prove less disruptive than expected, stabilizing economic growth expectations.
Even with the recent rally, gold miners trade at relatively low valuations compared to the broader stock market. Newmont Corp. currently trades at 13 times earnings, while rival Barrick Gold Corp. holds a price-to-earnings ratio of 8.8, significantly below the S&P 500’s average of 27 times earnings.
With gold prices at record highs and institutional investors increasing their exposure, many analysts believe that precious metal stocks remain underrepresented in investment portfolios, signaling potential long-term upside for the sector.
“Most investors could benefit from physical gold or precious metals equities — the sector is under-represented within portfolios,” Schoffstall added.
As global uncertainty persists, gold miners continue to capture investor attention, positioning themselves for further gains in the months ahead.
