How to choose the leading gold stocks? Investment opportunities worth paying attention to in the 2025 market wave

Gold Prices Hit New Highs, Gold Stocks Rise Along with the Surge

Since the start of 2025, the gold market has set multiple historical records. In just three months, gold prices have reached new highs 20 times, with COMEX gold futures soaring by $430 in a short period, a 15% increase, breaking the psychological barrier of $3,500 per ounce for the first time.

Behind this strong momentum are three main drivers. First, global geopolitical risks are escalating—ongoing Russia-Ukraine conflict, tense Middle East situation, and uncertainty over the US new administration’s tariff policies—all boosting market risk aversion. Second, expectations of a Fed rate cut are fermenting, weakening the US dollar’s credit foundation, significantly lowering the opportunity cost of holding gold and stimulating strategic demand from central banks and investment institutions worldwide. Third, the global central bank gold-buying frenzy continues, with official gold purchases in 2024 exceeding 1,000 tons for the third consecutive year, while new mineral supply remains limited and recycling declines, tightening the supply-demand structure.

As a result, gold stocks linked to gold prices are also performing remarkably. Mining and refining-related gold stocks have surged notably, with Canadian mining giant Agnico Eagle (AEM) up 42% year-to-date; South African miner DRDGold (DRD) soaring 57%; and Alamos Gold (AGI), despite a pullback, still gaining 27% for the year. The SPDR Gold Shares ETF (GLD), tracking gold spot prices, approaches a 20% return, demonstrating the diversified profit potential of gold stocks.

What Are Gold Stocks? Why Should You Pay Attention?

Gold stocks refer to publicly traded companies whose business is closely related to gold. These companies are involved in exploration, mining, refining, processing, sales, and related financial services across the entire industry chain.

Unlike gold spot or gold ETFs, the performance of gold stocks is influenced by multiple factors. When gold prices rise, gold stocks often surge even more—because company revenues and profits increase accordingly, and market expectations for the industry also rise. Over the past 50 years, gold prices have increased over 62 times, and gold stocks have outperformed this growth.

However, it’s important to note that gold stock prices are not absolutely positively correlated with gold prices. Company performance, operational efficiency, and cost control also significantly impact stock prices. This means that even if gold prices fall, well-performing gold companies may remain relatively strong; conversely, they may weaken if conditions change.

Overview of Leading US Gold Stocks

In the US stock market, gold stocks can be divided into three sectors based on their position in the industry chain:

Upstream mining and refining companies: Directly extract gold from mines and process it into tradable raw materials.

Midstream royalty companies: Provide financing to mining operations, earning a share of mineral sales revenue or metal output.

Downstream processing and sales companies: Engage in processing gold products, jewelry manufacturing, etc.

Upstream representatives: Barrick Gold (GOLD) and Newmont (NEM)

Barrick Gold founded in 1983, is one of the world’s largest gold miners, with a market cap exceeding $27 billion, operating 16 mining sites across 13 countries. In Q1 2025, its gold production reached 758,000 ounces, hitting the high end of company estimates, with quarterly revenue of $3.13 billion, up 13.8% year-over-year.

Although production declined from 940,000 ounces in the same period last year, the soaring gold prices lifted the average realized price from $2,075 to $2,898 per ounce, driving profits beyond expectations. Adjusted EPS was $0.35, higher than the market forecast of $0.30. The company maintains its full-year gold production forecast between 3.15 and 3.5 million ounces.

Newmont, as the world’s largest gold producer and the only gold mining company in the S&P 500, set a record high in Q1 2025, with net profit of $1.9 billion, nearly 11 times higher than the same period last year, and EPS of $1.68, with an adjusted EPS of $1.25, significantly surpassing the market expectation of $0.9. Despite an 8.3% YoY decline in gold output to 1.54 million ounces, the gold price surged to a record high of $2,944 per ounce, up 41% YoY, demonstrating strong profitability growth.

Midstream representatives: Wheaton Precious Metals (WPM) and Goldcorp (KGC)

Wheaton Precious Metals established in 2004, is a unique precious metals streaming company based in Canada. Unlike traditional miners, WPM enters into purchase agreements with global mines, buying a portion or all of the physical metals at discounted prices. In Q1 2025, EPS was $0.55, exceeding the market forecast of $0.52; revenue surpassed $470 million, about 13% above analyst estimates. RBC subsequently raised its target price from $75 to $80.

Goldcorp focuses on precious metals mining and processing, with operations across the Americas, Russia, and West Africa. In Q1 2025, free cash flow doubled YoY, and the company announced a $650 million shareholder capital return plan. Gold equivalent production reached 512,088 ounces, with a per-ounce margin of $1,814, up 67% YoY, reflecting robust financial health.

Leading Gold Stocks in Taiwan

Taiwan has fewer gold stocks; three representative companies are:

KYMCO (1785) is a major manufacturer in Taiwan’s precious and rare metals recycling and processing industry. In Q1 2025, revenue was NT$8.243 billion, up 30.6% YoY. Gross profit was NT$1.219 billion, up 70.6%; operating profit NT$839 million, up 145%, mainly driven by stable income from non-precious metal processing services. However, due to volatile precious metal prices and related hedging losses, net profit attributable to the parent decreased 44.75% to NT$358 million.

Jin Yi Ding (8390) is a major precious metal recycling company in Taiwan, founded in 1997. About 30% of revenue comes from precious metal recycling, mainly copper-based industrial metals account for about 50%. Benefiting from TSMC’s supply chain expansion and rising precious metal prices, Q1 revenue was NT$1.106 billion, gross profit NT$188 million, pre-tax profit NT$145 million, net profit attributable to the parent NT$117 million, with EPS of NT$1.22, a significant YoY increase.

Jialong (9955), established in 1996, is a Taiwan-based precious metal refining company, with about 90% of revenue from metal sales. Despite previous continuous losses and no dividends for 10 years, its high proportion of precious metals makes it more sensitive to gold price fluctuations. Driven by rising global precious metal prices and a recovery in semiconductor industry demand, Q1 consolidated revenue was NT$320 million, up about 12% YoY; net profit after tax was NT$35 million, EPS approximately NT$0.38, an 8% increase from last year.

Core Factors Affecting Gold Stock Prices

Gold Price Fluctuations and Profit Transmission

Gold prices are the most direct factor influencing gold stocks. Changes in global gold market prices directly affect the profitability of gold mining and sales companies. According to the latest World Gold Council report, in Q1 2025, global gold demand reached 1,206 tons, a slight increase of 1% YoY, the highest level since 2016.

Goldman Sachs forecasts that by the end of 2025, gold prices could reach $3,700 per ounce. If a global recession or Fed policy independence impacts occur, prices could further surge to $4,500. UBS maintains a target of $3,500 and has raised its annual net inflow forecast for gold ETFs to 450 tons, reflecting market optimism about gold investment prospects.

Macroeconomic and Geopolitical Landscape

Increased economic uncertainty boosts risk aversion. Recession fears, political turmoil, and geopolitical tensions prompt investors to shift funds into safe-haven assets like gold, pushing up gold prices and gold stocks. Ongoing conflicts like Russia-Ukraine, Middle East tensions, and US-China trade negotiations continue to support safe-haven demand.

Interest Rate Environment and Monetary Policy

Low interest rates generally favor gold prices because they reduce the opportunity cost of holding non-yielding assets. Conversely, when central banks raise interest rates to combat inflation, investors may shift to higher-yield assets, reducing gold demand and dragging down gold stock performance.

Cost Control and Operational Efficiency

Production costs and operational efficiency of gold mining companies directly impact profitability. Rising labor, equipment, energy costs, and environmental compliance expenses may squeeze margins. Conversely, technological advances or management optimization can lower costs and boost profits.

Supply-Demand Structure and Industry Trends

The balance of global gold supply and demand influences price trends. New mine discoveries, declining mineral recycling, and changing jewelry and industrial demand all alter the supply-demand landscape. Currently, central banks’ continued gold purchases and limited mineral supply support gold prices, benefiting long-term gold stock performance.

Gold Stocks vs. Gold Investment: How to Choose?

Investors optimistic about gold price trends can choose to buy physical gold (deposits, coins, bars) or gold ETFs, or opt for gold stocks. Each has its characteristics.

Gold and Gold ETFs tend to have lower risk, as gold as a precious metal has relatively stable value and high global recognition. However, returns are generally lower than stocks or other investment tools. Gold ETF prices are affected by global economic conditions, political situations, and monetary policies.

Gold stocks carry higher risk, influenced not only by gold prices but also by company management, profitability, and operational factors. However, they offer higher potential returns, especially during gold surges, as company earnings and stock prices often increase more significantly.

Investors should consider their investment goals, risk tolerance, and experience. Those seeking stability and hedging may prefer gold; those aiming for higher returns and willing to accept higher risk may prefer gold stocks.

Pros and Cons of Investing in Gold Stocks

Investment Advantages

Enjoying the multiplier effect of gold surges Gold as a safe-haven asset tends to rise during global economic instability, preserving value and resisting currency depreciation. Investing in gold stocks is an indirect way to invest in gold, allowing investors to benefit from gold price increases. Importantly, gold stocks often outperform gold itself, making them suitable for yield-seeking investors.

Diversification tool Gold stocks diversify asset allocation without holding physical gold directly. During economic downturns, cyclical stocks may decline, but gold stocks often perform well, helping to spread risk within a portfolio.

Investment Disadvantages

Higher volatility than gold Gold stocks are more volatile than gold itself. While they can offer higher gains during upswings, they also face larger declines. For example, from April to October 2022, gold prices fell 15%, but gold stocks dropped 38%.

Company-specific risks Different gold companies face management risks, including production costs, operational efficiency, and regulatory constraints. Financial difficulties in a company can lead to losses for investors.

Practical Guide to Investing in Gold Stocks

Strategy 1: Diversify via ETFs

Investors can choose funds or ETFs that include gold stocks. VanEck Vectors Gold Miners ETF (GDX) and VanEck Vectors Junior Gold Miners ETF (GDXJ) are popular options.

GDX and GDXJ cover major global gold-related companies, effectively diversifying risk. They differ in weighting: GDX emphasizes large companies like Barrick and Newmont, while GDXJ focuses on smaller-cap firms like Goldcorp. Over the past year, GDX returned 29.92%, over five years 26.69%; GDXJ returned 32.59% and 27.85%, respectively.

Strategy 2: Direct Stock Purchase

Besides ETFs, investors can buy individual stocks directly. For Taiwanese stocks, use domestic brokers; for US stocks, through overseas brokers or via cross-border trading.

Common platforms include Mitrade (commission-free, supports TWD deposits/withdrawals, regulated by ASIC and CySEC), Interactive Brokers (USD 0.005 per share commission, supports Chinese customer service), TD Ameritrade (no commission, minimum deposit $25,000), Firstrade (no commission, no minimum deposit), etc.

Future Trends in Gold Stocks

As global economic and geopolitical uncertainties persist, gold stocks will undoubtedly remain a key asset class for investors.

Trend 1: Long-term solid support for gold prices Although short-term corrections may occur due to optimistic trade sentiment, ongoing geopolitical tensions, Middle East conflicts, and US-China trade uncertainties continue to support safe-haven demand, providing long-term upward momentum for gold prices.

Trend 2: Mining companies’ expansion wave High gold prices stimulate mining companies to expand capacity in resource-rich regions (Africa, Australia, South America). The global gold mining industry is expected to grow steadily from 2025 to 2030, with Asia and North America as major growth markets.

Trend 3: Technology-driven industry upgrades AI and big data are transforming gold exploration and production, improving efficiency across the entire process. In 2024, mining companies invested $218 million in AI systems, which is expected to reduce costs and increase capacity industry-wide.

In summary, gold stocks are a noteworthy investment area in today’s capital markets. Investors who grasp industry trends and adopt rational strategies are likely to achieve good returns from gold stock investments.