Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 605

The shine is back on gold, and gold miners

Gold and gold miners have been among the better-performing asset classes so far in 2025 and they were among the strongest performers in 2024. The price of gold recently hit another record high, with ICE’s LBMA price index surpassing US$3,000 for the first time. 

Recent price rises have been attributed to Trump’s tariffs and the US Federal Reserve potentially pausing any more rate cuts. While this uncertainty and interest rate environment bodes well for gold, these elements were absent in 2024.

The price movements of gold in 2024 had many analysts scratching their heads, because normally when risky assets such as equities do well, as they did, defensive assets, such as gold, do poorly. In 2024, both ‘risky’ equities and ‘defensive’ gold performed well.

Also, when interest rates fall, as they started to in the US in the second half of 2024, gold has historically not done well. It’s therefore worthwhile to understand what could have driven the price of gold and understand why demand for the yellow metal could continue. And why gold miners are profiting. 

Firstly, central banks have been stockpiling gold. 2024 was a big year of central bank buying. According to the World Gold Council, ”central banks continued to hoover up gold at an eye-watering pace: buying exceeded 1,000 tonnes for the third year in a row, accelerating sharply in Q4 to 333 tonnes.”

In addition to central bank buying, the other factor driving gold demand has been growing geopolitical uncertainty, the threat of tariffs and US debt. Tariffs lead to inflation. In addition, many investors are staying away from US treasury bonds as the American economy remains embroiled in heavy, seemingly uncontrolled debt. 

The rationale is that rising US debt often leads to concerns about inflation. When a government accumulates significant debt, it may resort to measures such as printing more money or increasing government spending, potentially leading to inflationary pressures. With inflation at the forefront of investors’ minds, they may be buying gold as a hedge against the return of inflation.

Buying physical gold is not the only way to potentially benefit from a rising gold price. Some investors buy gold miners.

Gold miners

One of our predictions for 2025 was captured in the title of our blog, “Gold stocks seek to reconnect with gold in 2025.” We highlighted that the performance of gold miners had been lagging the performance of physical gold over the past few years. This was unusual and we expected the miners to reconnect. 

In the past, gold miners tended to outperform gold bullion when the price of gold rose and underperform when the gold price fell. We think the connection may have restarted. 

We think, fundamentally, that gold miners also have positive tailwinds. While gold miners were not immune from the recent inflation, and the all-in-sustaining costs for mining gold have risen since 2016, disciplined mining companies can now generate substantial margins with the price of gold so high.

Investors are starting to take note. As mentioned above, GDX rose by 14.02% in January. This could be the beginning of a reversion-to-the-mean trend that sees gold mining equities again displaying their leverage to the gold price and outperforming bullion when gold prices rise.  It still has a long way to go. You can see that over six months, the gold price has risen 21.33%, but GDX has only returned 9.23%.

Accessing gold through ETFs

ETFs are an efficient way for investors to access gold investing. There are gold miners ETFs and there are ETFs that invest in physical gold bullion. Below we outline the risks of each type of exposure to gold, owning gold bullion and owning gold miners:


While each gold strategy has its merit for portfolio inclusion, you should assess all the risks and consider your investment objectives.

 

Arian Neiron is CEO & Managing Director of Asia Pacific at Van Eck. VanEck’s Gold Bullion ETF (ASX: NUGG) is an investment in Australian sourced gold. Investors can get diversified exposure to gold miners through the Van Eck Gold Miners ETF (ASX: GDX). Past performance is no guarantee of future performance and the above is not a recommendation. Speak to your financial advisor or stockbroker.

 

RELATED ARTICLES

Why gold’s record highs in 2025 differ from prior peaks

Is gold a growth or defensive asset?

Gold $5,000?

banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

7 examples of how the new super tax will be calculated

You've no doubt heard about Division 296. These case studies show what people at various levels above the $3 million threshold might need to pay the ATO, with examples ranging from under $500 to more than $35,000.

The revolt against Baby Boomer wealth

The $3m super tax could be put down to the Government needing money and the wealthy being easy targets. It’s deeper than that though and this looks at the factors behind the policy and why more taxes on the wealthy are coming.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Latest Updates

Planning

Will young Australians be better off than their parents?

For much of Australia’s history, each new generation has been better off than the last: better jobs and incomes as well as improved living standards. A new report assesses whether this time may be different.

Superannuation

The rubbery numbers behind super tax concessions

In selling the super tax, Labor has repeated Treasury claims of there being $50 billion in super tax concessions annually, mostly flowing to high-income earners. This figure is vastly overstated.

Investment strategies

A steady road to getting rich

The latest lists of Australia’s wealthiest individuals show that while overall wealth has continued to rise, gains by individuals haven't been uniform. Many might have been better off adopting a simpler investment strategy.

Economy

Would a corporate tax cut boost productivity in Australia?

As inflation eases, the Albanese government is switching its focus to lifting Australia’s sluggish productivity. Can corporate tax cuts reboot growth - or are we chasing a theory that doesn’t quite work here?

Are V-shaped market recoveries becoming more frequent?

April’s sharp rebound may feel familiar, but are V-shaped recoveries really more common in the post-COVID world? A look at market history suggests otherwise and hints that a common bias might be skewing perceptions.

Investment strategies

Asset allocation in a world of riskier developed markets

Old distinctions between developed and emerging market bonds no longer hold true. At a time where true diversification matters more than ever, this has big ramifications for the way that portfolios should be constructed.

Investment strategies

Top 5 investment reads

As the July school holiday break nears, here are some investment classics to put onto your reading list. The books offer lessons in investment strategy, financial disasters, and mergers and acquisitions.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.