Seize the golden market! These quality stocks are worth investors' attention

Since 2025, the gold market has experienced a rare upward trend. In just three months, international gold prices have hit a total of 20 new historical highs. The driving forces behind this rally include escalating geopolitical tensions, brewing expectations of central bank rate cuts, the global de-dollarization wave, and ongoing central bank gold purchases. Against this backdrop, stocks of companies related to gold have also risen sharply, becoming a focus in the capital markets.

Investment Logic of Gold Stocks

Gold stocks essentially bet on gold prices. When the global economy faces uncertainty, investors seek safe-haven assets, making gold popular. Listed companies involved in gold mining, refining, and sales have performance highly correlated with gold prices. When gold prices rise, these companies’ profit margins significantly improve, driving their stock prices higher.

Data speaks: According to the World Gold Council, in Q1 2025, global gold demand reached 1,206 tons, a new high since 2016 for the same period. Goldman Sachs forecasts that by year-end, gold prices could reach $3,700 per ounce, with extreme cases possibly hitting $4,500. These forecasts provide strong fundamental support for related stocks.

It is worth noting that gold stocks often outperform gold itself. For example, Agnico Eagle (AEM) has gained 42% year-to-date, while gold prices have increased about 20%. This is a leverage effect—company earnings growth outpaces commodity price increases.

Core Selection of U.S. Gold Stocks

U.S. gold stocks can be divided into three tiers based on the industry chain:

Upstream mining companies are the most direct beneficiaries. These companies extract gold directly from mines, with gross margins increasing as gold prices rise.

Midstream royalty companies are an advanced choice. They do not require large capital investments in mining but sign agreements with mines to purchase physical metals at fixed discounts, with lower risk but slightly less flexibility.

Downstream jewelers benefit most indirectly, mainly relying on jewelry consumption prosperity.

Key Company Scan

Barrick Gold Corporation (GOLD) is the world’s largest gold producer, with a market cap exceeding $27 billion, operating in 13 countries. In Q1 2025, gold production was 758,000 ounces, revenue $3.13 billion, up 13.8% year-over-year. Notably, the average realized price rose from $2,075 per ounce last year to $2,898, with net profit exceeding expectations—EPS of $0.35, better than the estimated $0.30. The company maintains its full-year production guidance of 3.15–3.5 million ounces, with an 18.10% increase in stock price since the start of the year.

Newmont Corporation (NEM) is the world’s largest gold mining company and the only gold mining firm in the S&P 500. In Q1, net profit reached $1.9 billion, over ten times higher than the same period last year, with EPS of $1.68, far exceeding expectations. Despite an 8.3% YoY decline in gold output to 1.54 million ounces, the profit margin surged driven by gold prices soaring to $2,944 per ounce, up 41% YoY, with a 30.57% increase since the beginning of the year.

Wheaton Precious Metals (WPM) adopts a unique business model, signing purchase agreements with global mines to buy precious metals at discounts, avoiding mining capital pressures. In Q1, EPS was $0.55, surpassing market expectations of $0.52; revenue was $470 million, 13% above analyst estimates. Royal Bank of Canada recently raised its target price from $75 to $80. Since the start of the year, the stock has gained 35.18%.

Kinross Gold Corporation (KGC) focuses on precious metals mining across the Americas, Russia, and West Africa. In Q1, free cash flow doubled YoY, and it announced a $650 million shareholder capital return plan. Gold equivalent production was 512,088 ounces, with per-ounce sales margin profit up 67% YoY to $1,814. The stock has risen 38.77% since the beginning of the year.

Investment Opportunities in Taiwan Gold Stocks

There are fewer gold stocks in Taiwan’s market, but the quality is solid.

KYMCO (1785) is a major player in Taiwan’s circular economy for precious and rare metals, covering processing and recycling. In Q1 2025, revenue was NT$8.243 billion, up 30.6%. Gross profit was NT$1.219 billion (up 70.6%), operating profit NT$839 million (up 145%). This strong performance mainly comes from stable contributions from value-added services (VAS). Note that due to volatile precious metal prices, there was a hedging loss in Q1, with net profit down 44.75% QoQ, but the long-term trend remains upward, with a 26.5% increase over the past year.

Jin Yi Ding (8390) is Taiwan’s leading metal resource recycling company, with 30% of revenue from precious metals and 50% from industrial metals. Benefiting from TSMC’s supply chain expansion, rising precious metal prices, and its Chinese subsidiary turning profitable, Q1 results were strong. Revenue was NT$1.106 billion, operating profit NT$126 million, net profit NT$117 million, EPS NT$1.22, with a significant YoY increase. The stock has gained 7.7% over the past year.

Jialong (9955) is a Taiwan precious metal refining plant, with 90% of revenue from metal sales, highly sensitive to gold price fluctuations. In 2025, driven by rising global precious metal prices and recovering semiconductor demand, Q1 revenue was about NT$320 million, up 12%; gross margin around 20%; net profit after tax NT$35 million, EPS NT$0.38, up 8% YoY.

Core Factors Influencing Gold Stock Performance

When investing in gold stocks, consider the following variables:

Gold price trend is the primary factor. When gold prices rise, mining companies’ profit growth often exceeds gold price increases, creating a positive leverage effect. For example, from April to October 2022, gold prices fell 15%, but gold stocks dropped 38%, showing inverse leverage.

Global economic conditions influence safe-haven demand. Recessions or political turmoil boost gold allocation needs, lifting gold prices and related stocks.

Central bank policies are invisible drivers. Rate cuts reduce the holding costs of gold, attracting more capital; rate hikes divert funds to yield assets.

Mining costs and operational efficiency directly determine profit margins. Technological advances and management optimization can lower costs, while rising labor and energy costs squeeze margins.

Supply and demand balance shapes long-term trends. Central banks’ ongoing gold purchases, limited mineral supply, and declining recycling are creating a supply-demand tightness.

Gold Stocks vs. Gold ETFs: How to Choose

If bullish on gold, should you buy gold ETFs or gold stocks? Each has pros and cons.

Gold ETFs (like GLD) track spot gold prices, with relatively stable risk but milder returns, usually annualized returns not exceeding gold price gains. Gold stocks are more volatile, amplifying gains during rallies and losses during declines. Since the start of 2025, GLD’s return is about 20%, while the best-performing gold stocks have exceeded 40%.

High-risk investors should prefer gold stocks, especially upstream miners, due to leverage effects. Conservative investors can choose gold ETFs or midstream royalty companies (like WPM) to balance risk and return. Very conservative investors should avoid individual stocks and opt for gold ETFs or funds.

Investment Methods for Gold Stocks

Ordinary investors have two main approaches:

Method 1: Diversify risk via industry ETFs

VanEck Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ) include top global gold companies. GDX emphasizes large firms like Newmont and Barrick, with a 1-year return of 29.92%; GDXJ focuses on small- and mid-cap companies, with a 1-year return of 32.59%. Investors can allocate based on risk appetite.

Method 2: Directly buy individual stocks

Open accounts with brokers. For Taiwan stocks, use domestic brokers; for U.S. stocks, use cross-border or overseas brokers (like Mitrade, Interactive Brokers, TD Ameritrade). Mitrade offers commission-free trading and supports NTD deposits/withdrawals, making it suitable for Taiwanese investors; Interactive Brokers and TD Ameritrade are suitable for large-volume trading.

Risks and Opportunities in Gold Stock Investment

Opportunities are clear: gold stocks often outperform gold prices, especially during bullish cycles; they diversify assets and hedge against economic cycles; ongoing central bank gold purchases and limited mineral supply create a tight supply-demand pattern.

Risks include high volatility and amplified losses during downturns; heterogeneity risks across companies—such as mining permits, political risks, and cost fluctuations; geopolitical surprises and policy reversals can accelerate adjustments.

Outlook and Recommendations

Looking ahead, the fundamentals of gold stocks remain solid:

First, long-term upward momentum of gold prices persists. Ongoing geopolitical tensions, Middle East conflicts, US-China trade uncertainties continue to support safe-haven demand, with structural gold-buying trends intact. Although short-term corrections are possible, the long-term drivers are strong.

Second, mine capacity expansion is imminent. High gold prices incentivize mining companies to increase investments, with resource-rich regions (Africa, Australia, South America) becoming main growth sources. The global gold mining industry is expected to grow steadily from 2025 to 2030.

Third, technological advances are reshaping mining. AI and big data applications in exploration and production improve efficiency and reduce costs. In 2024, AI investment in mining reached $218 million, and future investment enthusiasm will only grow.

Investment advice: For steady returns, allocate to GDX or GDXJ; for higher risk tolerance, select leading stocks like Newmont, Barrick, WPM, and review positions regularly; Taiwan investors may consider KYMCO and Jin Yi Ding for long-term holdings.

In summary, gold stocks have become a focus in today’s capital markets. Grasping industry trends, choosing quality companies, and managing risk exposure can lead to substantial gains in this wave of market movement.