The 2025 gold market explosion: Why are these gold concept stocks worth paying attention to?

Gold Prices Hit Record Highs, Concept Stocks Surge Fiercely

Since the beginning of 2025, the international gold market has staged a spectacular show. In just three months, gold prices have hit a total of 20 new historical highs, a rare occurrence in the history of the gold market.

The main factors driving this surge are threefold: First, global geopolitical tensions—stalemate in the Russia-Ukraine conflict, escalating Middle East tensions, and unpredictable tariffs policies of the new US administration—all significantly boost market risk aversion, reactivating gold’s traditional role as a safe-haven asset. Second, expectations of potential rate cuts by the Federal Reserve and a loosening of the US dollar’s credit foundation are gradually fermenting, lowering the cost of holding gold, while gold’s strategic position as an alternative reserve asset rises. Third, the ongoing global central bank gold-buying frenzy—official gold purchases in 2024 have exceeded 1,000 tons for three consecutive years—coupled with supply tightening due to mineral restrictions and declining recycling volumes.

This rally peaked in mid-April. In just 8 trading days, COMEX gold futures skyrocketed by $430, a 15% surge, breaking the psychological barrier of $3,500 per ounce for the first time in history. Although a correction followed, most investment institutions remain cautiously optimistic. They believe that the short-term explosive rally may be nearing its end, but under the dual influence of geopolitical risk aversion and de-dollarization waves, the downside support for gold prices remains solid, and the long-term outlook remains positive.

The strong performance of gold prices is directly reflected in gold concept stocks, especially those involved in gold mining and refining. For example, Canadian mining giant Agnico Eagle (AEM) has gained 42% year-to-date; South African veteran miner DRDGold (DRD) surged 57%; Alamos Gold (AGI), despite a correction, still maintains a 27% annual increase. The SPDR Gold ETF (GLD), tracking spot gold prices, has also approached a 20% return since the start of the year.

What Are Gold Concept Stocks? What Are the Investment Logic?

Gold concept stocks refer to listed companies whose business operations are related to gold. These companies are involved in the entire industry chain, including gold exploration, mining, processing, sales, investment, and financial services. Their stock performance is often closely correlated with gold price movements—rising gold prices tend to enhance their profitability, pushing their stock prices higher.

However, there is a subtle but important distinction: gold prices and gold concept stock prices are not absolutely positively correlated. Besides being influenced by gold prices, these stocks are also affected by company-specific performance, operational efficiency, market sentiment, and other factors. Nonetheless, when gold prices rise, the marginal profit of mining companies often increases significantly, which usually leads to stock price gains exceeding the gold price surge itself—this is the attractiveness of gold concept stocks.

According to the latest report from the World Gold Council, the total global gold demand in Q1 2025 reached 1,206 tons (including OTC investments), a slight YoY increase of 1%, setting a new high since 2016 for the same period. Goldman Sachs forecasts gold prices could rise to $3,700 per ounce by the end of 2025, while UBS maintains a target of $3,500, and expects net inflows into gold ETFs to reach 450 tons annually. These all reflect market confidence in the long-term prospects of gold.

US Gold Leaders: Barrick, Newmont, and Wheaton Lead

In the US stock market, gold concept stocks can be divided into three categories based on the industry chain:

Upstream (Mining & Smelting): Companies directly extracting gold from mines, most sensitive to gold price fluctuations.

Midstream (Royalties & Streaming): Companies providing financing to mining operations, earning a percentage of gold sales revenue in return.

Downstream (Processing & Sales): Jewelry manufacturers and gold product processing companies.

Let’s look at the performance of major representative companies:

Barrick Gold (GOLD): Global Mining Leader

Founded in 1983, Barrick Gold is one of the world’s largest gold miners, with a market value exceeding $27 billion. It operates 16 mining sites across 13 countries, mainly engaged in gold and copper mining.

In Q1 2025, its performance was impressive. Despite gold production dropping from 940,000 ounces last year to 758,000 ounces, driven by a significant rise in gold prices, the average realized price increased from $2,075 to $2,898 per ounce. As a result, revenue reached $3.13 billion, up 13.8% YoY; adjusted EPS was $0.35, surpassing the market estimate of $0.30. The company maintains an annual production forecast of 3.15 to 3.5 million ounces.

Newmont (NEM): The Only Gold Mining Stock in S&P 500

As the world’s largest gold mining company, NEM performed modestly in 2024, but with the surge in gold prices, it has become highly attractive for investment. It is the only gold mining stock in the S&P 500 index, providing market stability.

In Q1 2025, NEM posted remarkable results: net profit of $1.9 billion, nearly 11 times higher than the same period last year; EPS of $1.68, and an adjusted EPS of $1.25, far exceeding the market expectation of $0.9. Although gold production decreased by 8.3% YoY to 1.54 million ounces, the profit growth was robust amid a historic high gold price of $2,944 per ounce, up 41% YoY.

Wheaton Precious Metals (WPM): Steady Profits from “Procurement Flow” Model

Wheaton Precious Metals (founded in 2004) is not a traditional mining company but adopts a special “precious metals streaming” model, signing agreements with global mines to purchase gold at favorable prices. This lightweight asset model carries relatively lower risks.

In Q1 2025, earnings beat expectations: EPS of $0.55 versus expected $0.52; revenue exceeded $470 million, 13% above analyst estimates. After hours, the stock rose 4.62%, and Royal Bank of Canada raised its target price from $75 to $80.

Goldcorp (KGC): Dual Growth in Cash Flow and Shareholder Returns

Goldcorp mainly operates gold mining and processing, with silver mining also involved, 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.

Key indicators performed well: gold equivalent production reached 512,088 ounces; per-ounce sales margin increased significantly by 67% YoY to $1,814; operating cash flow was $597.1 million; free cash flow attributable was $370.8 million, demonstrating strong financial health.

Taiwan Gold Stocks: Koyo, Jinyiding, Jialong—A Three-Headed Market

Taiwan’s gold concept stocks are relatively scarce, mainly represented by these three:

Koyo (1785) is a major manufacturer in Taiwan’s precious and rare metals industry, with Q1 2025 revenue of NT$8.243 billion, a significant increase of 30.6% YoY, mainly due to rising precious metal prices and expansion in semiconductor target materials. Gross profit was NT$1.219 billion, up 70.6%; operating profit NT$839 million, up 145%. However, due to sharp fluctuations in precious metal prices causing hedging losses, net profit dropped to NT$358 million.

Jinyiding (8390) is a major resource recycling company in Taiwan, established in 1997. Its main revenue comes from precious metal recycling, with gold accounting for 30% and industrial metals like copper for 50%. Benefiting from TSMC’s supply chain expansion and rising precious metal prices, Q1 2025 consolidated revenue reached NT$1.106 billion, pre-tax net profit NT$145 million, with a basic EPS of NT$1.22, showing significant YoY growth.

Jialong (9955) is a Taiwan-based precious metal refining company, with about 90% of revenue from metal sales. Despite continuous losses and no dividends for 10 years, its high proportion of gold business makes it more sensitive to gold price movements. In Q1 2025, consolidated revenue was about NT$320 million, up approximately 12% YoY; gross profit about NT$65 million (gross margin around 20%); net profit about NT$35 million, with EPS around NT$0.38.

Five Key Factors Affecting Gold Concept Stocks

1. Gold Price Fluctuations (Most Direct Driver)

This is the most direct factor influencing gold concept stocks. Gold price rising → mining companies’ revenue increases → profits grow → stock prices rise, forming a logical chain. Over the past 50 years, gold prices have surged over 62 times. Although there may be short-term corrections, institutions like Goldman Sachs and UBS remain optimistic about gold prices by the end of 2025.

2. Global Economic Conditions

Increased economic uncertainty (recession, political turmoil, etc.) heightens risk aversion, leading funds to flow into safe-haven assets like gold, pushing up gold prices and related concept stocks. Current factors such as the Russia-Ukraine situation, US-China trade negotiations continue to support safe-haven demand.

3. Interest Rates and Monetary Policies

Low interest rates favor gold rising, as they reduce the opportunity cost of holding non-yielding assets. When central banks raise rates to combat inflation, investors may shift to higher-yield assets, decreasing gold demand. The Fed’s rate cut expectations currently provide important support for gold’s surge.

4. Production and Operating Costs

Mining companies’ cost structures directly impact profitability. Rising labor, equipment, energy, and environmental costs squeeze margins; conversely, technological advances or management optimization can lower costs and boost profits.

5. Supply and Demand Balance

The balance between global gold supply (new mining + recycling) and demand (jewelry + investment + industrial use) determines gold prices. When supply is limited and demand is strong, gold prices are expected to rise.

Direct Gold Investment vs. Gold Concept Stocks Investment

Investors optimistic about gold prices face a choice: buy physical gold (gold certificates, coins, bars, ETFs) directly or invest in gold concept stocks?

Advantages of Gold Investment: Lower risk, relatively stable value as a precious metal, globally recognized. But returns are generally lower, with less volatility.

Advantages of Gold Concept Stocks: Greater profit potential, especially when gold prices surge—concept stocks often outperform gold price increases. For example, in Q1 2025, stocks like NEM, GOLD surged far beyond the 20% of GLD. They also offer diversification benefits and tend to perform well during economic downturns.

Disadvantages of Gold Concept Stocks: Higher volatility. From April to October 2022, gold fell 15%, but gold concept stocks dropped 38%. Additional risks include company management, production costs, and operational risks.

Investment Advice: Conservative investors should prefer gold and gold ETFs; aggressive investors may consider gold concept stocks; those with moderate risk tolerance can diversify via ETFs like GDX and GDXJ.

Two Ways to Invest in Gold Concept Stocks

Method 1: Diversified Investment via Funds or ETFs

VanEck Gold Miners ETF (GDX) and VanEck Junior Gold Miners ETF (GDXJ) include a basket of global large-cap gold-related companies, effectively diversifying risk.

GDX emphasizes large miners like Newmont and Barrick, with top holdings including Newmont (12.05%), AEM.TO (11.81%), WPM.TO (7.49%), ABX (6.59%), FNV.TO (6.57%).

GDXJ focuses on small-cap companies like Jinyiding Gold, with top holdings including AGI.TO (7.05%), HMY (6.80%), EVN.AX (6.25%), PAAS.TO (5.71%), BTO.TO (4.93%).

Over the past year, GDX returned 29.92%, GDXJ 32.59%; over five years, 26.69% and 27.85%, respectively. Investors can choose based on risk appetite.

Method 2: Direct Purchase of Stocks

Besides ETFs, investors can buy individual stocks directly. For Taiwan stocks, open an account with domestic brokers; for US stocks, use cross-border brokers like Mitrade, Interactive Brokers, TD Ameritrade, Firstrade, etc.

These platforms have different features: Mitrade supports TWD deposits/withdrawals with zero commission; InteractiveBrokers, established in 1977, supports multi-region account opening; TD Ameritrade is suitable for large transactions; Firstrade has no minimum account requirements.

Outlook: Three Future Trends for Gold Concept Stocks

Trend 1: Long-term Gold Price Rise Is Inevitable

Although short-term corrections may occur due to trade sentiment fluctuations, ongoing factors such as the Russia-Ukraine war, Middle East tensions, and US-China trade negotiations continue to support safe-haven demand. The de-dollarization wave and central bank gold purchases will provide long-term support, with gold prices expected to reach $3,500–$3,700 per ounce by the end of 2025.

Trend 2: High Gold Prices Stimulate Mining Expansion

High gold prices will incentivize miners to expand capacity in resource-rich regions like Africa, Australia, and South America. The global gold mining industry is projected to grow steadily from 2025 to 2030, with Asia and North America as key growth markets, significantly benefiting gold concept stocks.

Trend 3: AI and Big Data Transform Mining Industry

Artificial intelligence and big data are revolutionizing gold exploration and production processes. In 2024, mining companies invested $218 million in AI systems, and this trend is expected to strengthen, further improving mining efficiency and profitability.

Conclusion

As global economic uncertainties and geopolitical tensions intensify, gold concept stocks are undoubtedly becoming a focal point in capital markets. By understanding industry trends and adopting rational investment strategies, investors can achieve good returns in this field. Whether through ETFs for diversification or direct stock picking, decisions should be based on individual risk tolerance and investment goals. Now is an excellent time to cautiously position in this sector.