Gold Rally Continues: These 3 Mining Stocks Are Likely to Benefit
Gold continues to be one of the best-performing assetsin the last 12 months. The yellow metal is up about 29% in the last 12 months. And with both inflation and recession fears remaining front and center for investors, there’s reason to believe that gold may have more room to run.
Gold has its detractors as an investment. But if you look at it as a hedge against inflation, gold holds up pretty well. According to industry data, the price of gold has climbed an average of 9.7% in the last 25 years. Astute investors will point out that gold’s performance pales in comparison to the SPY ETF, which has about a 27% annual return over the same period.
However, gold has a different role and weight in an investor’s portfolio. While Bitcoin (i.e., digital gold) has also blown past gold’s performance, there’s a significant difference in the risk premium between the two assets.
That said, many investors will shy away from owning physical gold. But there’s still a way to get involved. Gold mining stocks typically lag the price of physical gold, but that means that 2025 is likely to be a big year for them; here are three names to consider.
But many investors can justify a higher price if you get what you pay for. And that’s the case with Newmont Corporation. The company’s revenue and earnings were sharply up year-over-year (YOY) in 2024 as the company was able to take advantage of gold’s rising price.
A similar setup is in play for 2025. Of the three mining stocks on this list, NEM is trading closest to analysts’ forecasts. However, if gold continues charging higher, those forecasts will likely rise.
It May Be Time for Gold to Shine for Freeport McMoran
Freeport McMoRan Inc. (NYSE: FCX) may not be the first name investors think about as a gold miner. But in the company’s most recent quarter, gold accounted for approximately 14% of the mining company’s revenue.
The company’s forecast presumes more of the same. Freeport McMoRan’s 1.6 million ounce production forecast is based on an average gold price of around $2,700 per ounce. However, that estimate may be conservative with the spot price of gold over $3,100 as of April 10.
The company’s gold profile can offset any uncertainty surrounding its copper business. At the CESCO conference in Santiago, Kathleen Quirk, president and chief executive officer (CEO), expressed concerns about the impact of tariffs on global copper demand.
That hasn’t caused analysts to waver. The Freeport McMoRan analyst forecasts on MarketBeat give the stock a $49.88 consensus price target,which would be a 60% increase for investors.
Barrick Gold Remains One of the Best in Class Miners
Like Freeport McMoRan, Barrick Gold Corp. (NYSE: GOLD) mines both copper and gold. However, in the case of Barrick Gold, the company’s revenue and earnings are heavily weighted to gold. The company is one of the world’s largest miners, with operations in 18 countries spanning four continents. In addition to size, Barrick owns many of the world’s largest and most prized portfolios of top-quality gold.
However, that size makes Barrick susceptible to interest rates. With expectations that the Federal Reserve will cut interest rates in 2025, and perhaps multiple times, the current earnings estimate from Barrick may be too low.
GOLD stock is trading above its 50- and 200-day simple moving average (SMA). Analysts continue to be bullish on the stock, with a $23.79 price target that implies a 22% upside.
