Gold mining equities have significantly outperformed the price of gold itself in 2025, reversing a multi-year trend of underperformance. Year-to-date, gold stocks have seen returns exceeding the underlying gold price by over 40%, a remarkable turnaround.
This surge is partly attributed to a substantial increase in bullion prices, with spot gold prices climbing over 34% in the past year, although recent price movements have been relatively contained.
The GDX index, tracking gold-exposed stocks, has particularly impressed in the last three months, outperforming spot gold by 15%. This performance is driven by strong rallies in companies like Gold Fields, Newmont Corporation, and Kinross Gold, which offset weaker performances from some large Australian players.
This positive shift marks a dramatic reversal from the period between 2019 and the end of 2024, where the GDX lagged behind gold prices by approximately 50%.
UBS analysts highlight the improved first-quarter results for many gold mining businesses as a key factor in this resurgence. They believe the sector is rebuilding investor confidence, and predict accelerated stock buybacks in the second half of 2025 should gold prices remain stable.
Mergers and acquisitions are also anticipated to increase, although many gold companies seem to favor organic growth and strategic portfolio adjustments.
However, as the current positive cycle matures, UBS analysts are becoming more selective in their stock choices. They are shifting focus from high-performing, potentially overvalued stocks to companies with turnaround potential.
Their preferred gold stocks currently include Barrick Gold, Endeavor, Kinross, AngloGold, and Franco-Nevada, while Agnico, Wheaton, and Fresnillo have been downgraded to a “neutral” rating.
