Gold Miners Ready for Breakout Amid Record High Prices

Key Points

• Gold prices have increased significantly over the years, with central banks buying substantial amounts since 2010, ensuring price stability.
• Sustained higher gold prices supports higher mining activity and, by extension, gold mining stocks.
• Gold mining stocks, such as Agnico Eagle Mines and Freeport-McMoRan, are expected to benefit from higher gold prices and increased output

Since October 2023, the spot price of gold is up about 75%. That outperformed most stocks at that time. But what most investors don’t realize is that if you go back 25 years, gold has climbed over 1,100% or nearly 12 times its price in 1999.

And this isn’t the first time there’s been a gold rush. Since the world moved away from the gold standard in 1971, there have been about four different bull markets. According to economist and author Jim Rickards, gold rose 2,185% from 1971 to 1980, and 670% from 1999 to 2011. And if you look at the entire 53-year span since 1971, gold is up 9,000%.

So much for the argument that gold is dead money.

But past performance doesn’t guarantee future performance, and skeptics will say gold looks a little toppy. In fact, it wouldn’t be surprising to see a slight correction in gold. But it’s not likely to last long. That’s because of who’s buying the gold. And it’s not investors like you and me. It's the central banks of many countries. 

Rickards points out that, since 2010, central banks have gone from being net sellers to net buyers of the yellow metal. Their net holdings have risen from 30,000 metric tonnes to 35,000 metric tonnes.

Now here’s what may really excite investors. When central banks start buying, they don’t change their minds easily. That means if retail investors start to sell, the central banks won’t let it drop too far. That’s the kind of assymetric trade that benefits opportunistic investors.

Why Gold Mining Stocks Should Stand Out

As attractive as physical or paper gold may look, many investors would like more options. That brings in basic materials stocks, particularly mining stocks. Gold mining output has been flat, even as the price of gold has increased. In fact. The 120 million ounces mined in 2024 were less than the 130 million ounces mined in 2018.

Now gold output is expected to rise through 2030, but it still won’t reach 2018 levels. That’s because, as investors are discovering with oil production, it’s getting harder to find gold, and the mining costs are increasing. However, like oil, as the price of gold rises, so does the cost-effectiveness of gold mining.

Gold miners are just starting to report earnings, and here are two names that just reported and may back up the bullish trend.

Agnico Eagle Mines Delivers High Quality with Low Risk

Agnico Eagle Mines Ltd. NYSE: AEM is the world’s third-largest gold producer. Two of the company’s core strengths are its unique positioning in low-risk mining jurisdictions and its strong financial returns.

Earlier this year, the company released its year-end 2024 reserve and resource statement and posted a 1% increase from 54.3 million ounces to 53.8 million ounces in 2023. This stands out at a time when most gold miners are posting a decline in their reserves.

For the quarter, Agnico Eagle generated revenue of $2.47 million, beating estimates for $2.44 million. The company also delivered earnings per share of $1.53, which beat estimates for $1.02 by 50%. As of the market close on April 24, AEM stock is up 4% in the last two trading sessions.

Freeport-McMoRan is a Hedge for Gold’s Everything Hedge

Freeport-McMoran Inc. NYSE: FCX is not a pure-play gold mining company. In fact, in the company’s first quarter 2025, gold accounted for only 12.8% of the company’s revenue. However, that’s likely to move higher in the coming years. And even if it doesn’t, Freeport-McMoRan is important to watch because the company is a primary miner of copper.

You see, gold isn’t as much of an inflation hedge as an everything hedge. And right now, you may make the same argument for copper. With demand for everything from data centers to electric vehicles, the world will need copper. However, Freeport-McMoRan president and chief executive officer (CEO) Kathleen Quirk has expressed concerns about how tariffs will impact global copper demand.

That means gold may become a more important part of the company’s asset mix. We’ll know more in a few quarters. In its most current quarter, Freeport delivered 24 cents in earnings per share on revenue of $5.73 billion.