Gold’s latest quarterly gains now seriously rival the rise seen in 1986, the year of the Chernobyl disaster. The comparison is powerful, yet it pales against the performance of gold miners, which could keep gaining, acording to Wall Street analysts.
The most active Gold futures contract rose 19.3% for the first quarter after settling at $3150.30 on Monday, marking its best performance since the third quarter of 1986 when it gained 24%. Gold has now hit 18 closing highs in 2025.
Demand is coming from central banks of countries such as China, which are buying up the shiny bar to lower their exposure to the U.S. dollar—and the potential arm-twisting that comes with it—after the freezing of Russian central bank assets. Retail investors are also buying up gold at places like Costco, where bars are among the top sales categories, and through physically backed exchange-traded funds, which have seen a rise in assets under management.
The gold rally has also fueled stocks of the companies mining it. Gold miners, as measured by the VanEck Gold Miners ETF, are up 34% in 2025 so far, inclusive of dividends, outperforming gold and on pace for their best quarter in about five years. Miners’ returns lagged gold last quarter and they’ve underperformed gold by 17% over the past decade, suggesting a reversal in fortunes could be under way.
“Gold stocks are finally working…will it continue?,” UBS analyst Daniel Major titled his note Monday morning. Theoretically, when gold moves higher, gold miners should outperform given the potential for growth and dividend yields, but that’s not been the case given persistent pressure to replace the depleting and grow production on miners while managing inflation on expenditures, Major wrote.
That theory makes it hard to recommend miners over the long-term, but in the near-term Major likes the setup. “With gold price >$3,000/oz we believe [earnings] consensus will almost certainty be revised higher” in coming weeks, he wrote. Current market prediction is for $3.10 in aggregate earnings for 2025.
Valuation is cheap too. The ETF is trading at 14 times 12-month forward earnings, lower than its 10-year average of 20.08 or 5-year average of 16.2 times. The differences between the historical average and current enterprise value to Ebitda, or earnings before interest, taxes, depreciation, and amortization, valuation is much less stark, but paints a similar picture.
Investors can also consider the iShares MSCI Global Gold Miners ETF, which has a slightly lower expense ratio of 0.39% as opposed to VanEck’s 0.510%. Expense ratios are important because they eat into returns over the longer term.
iShares assets under management at $1.3 billion are a fraction compared with VanEck’s $14.8 billion, but a fund with more than a billion in AUM generally means investors shouldn’t have to worry about moving in or out of the ETF.
ETFs offer a good way to own the 40-60 best gold mining stocks out of the universe. Investors looking to pick the individual gold mining stocks can consider Newmont, rated as Buy by BofA Securities analysts, and the largest holding in the iShares and Vaneck ETFs. Newmont projects its gold production to fall to 5.9 million ounces in 2025, from 6.85 million ounces last year. But if prices of gold hold, it’s could still benefit the most given its position as the world’s top gold producer.
BofA’s commodity strategist raised their prediction for gold price to $3,500 an ounce, with a 10% increase in investment demand.
UBS’ Major likes Barrick. The company, in its annual report this month, said it was assuming production in Africa’s Mali gold mines could restart on April 1, though it offers no assurances. The analyst sees that as a positive catalyst for the stock.
Something needs to be—its underperformed the VanEck ETF by more than 13 percentage points annually over the last three years. Its also good to note that gold has been in a bull market since September 2022, meaning it could be overvalued and vulnerable to corrections if early investors sell to lock in profits. That raises the prospect that higher predictions for gold are simply chasing the asset’s price momentum.
No one wants to be on the wrong side of the trade when gold shoots further to the moon.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com.