Tag: Gold trading

Gold Miners Outshine AI Stocks in 2025 With 135% Rally, Drawing Small-Cap Investor Interest

Posted on by slightbourne@noblecapitalmarkets.com

Gold stocks have emerged as one of the most powerful performers in 2025, eclipsing the high-flying semiconductor sector and catching the attention of investors seeking value beyond artificial intelligence. While much of the market narrative this year has revolved around chipmakers riding the AI boom, gold miners have quietly delivered staggering gains — up more than 135% — and positioned themselves as an unexpected leader in global equities.

The rally has been fueled by multiple forces. Central banks have accelerated purchases of gold as part of a broader de-dollarization trend, while investors have sought safe-haven assets amid heightened economic uncertainty. Federal Reserve rate cuts and growing inflows into gold-backed exchange-traded funds have further supported the surge. As a result, gold itself has climbed more than 45% this year, setting new all-time highs and marking its strongest annual performance since 1979.

This has translated into significant upside for miners. Global heavyweights such as Newmont Corp. and Agnico Eagle Mines have seen their shares more than double, while Zijin Mining has surged over 130% in Hong Kong. In London, Fresnillo Plc has nearly quadrupled, becoming the standout performer in the FTSE 100. Yet, the momentum is not limited to large caps. Smaller mining companies — particularly those with scalable production capacity and strong cost control — are increasingly attractive to investors looking for opportunities that combine growth with relative undervaluation.

One of the striking differences between gold equities and semiconductor stocks lies in valuations. The MSCI Gold Miners Index currently trades at around 13 times forward earnings, slightly below its five-year average, suggesting the rally is backed by fundamentals. In contrast, the semiconductor index trades near 29 times earnings, well above its historical trend. For small-cap investors, this dynamic suggests gold miners may still offer more sustainable upside, especially as earnings growth outpaces share price appreciation.

Beyond valuations, sector fundamentals point to further resilience. Elevated margins, robust cash flows, and disciplined capital management have allowed gold miners to reinvest in operations while returning capital to shareholders. The sector is benefiting from margin expansion as gold prices remain elevated, giving even mid-tier and junior miners the potential to outperform. For small-cap investors, this creates a unique entry point into a sector often overlooked during periods of tech dominance.

While enthusiasm around AI-driven chipmakers is unlikely to fade, the current cycle underscores the importance of diversification. Investors chasing technology gains may risk overlooking industries where fundamentals remain strong, valuations are reasonable, and long-term demand drivers are intact. The outperformance of gold miners in 2025 serves as a reminder that market leadership can emerge from unexpected places — and for small-cap investors willing to broaden their focus, the precious metals sector offers compelling opportunities.

Gold Nears All-Time Highs: Why It’s Defying the Typical Market Cycle

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– Gold surges as investors seek safety from Trump’s tariff threats.
– U.S. fiscal worries and a weaker dollar drive demand for gold.
– Gold defies norms, staying strong despite rising Treasury yields.

Gold is trading just a few percentage points below its all-time highs, confounding expectations for a significant retracement typical of most asset classes. In a normal market cycle, rapid price increases are often followed by pullbacks as traders take profits and reassess fundamentals. But gold’s current behavior suggests that broader forces are at play, reshaping how investors evaluate risk and value in today’s geopolitical and macroeconomic landscape.

As of May 23, 2025, gold surged nearly 2% to $3,357.78 an ounce, extending its weekly gain toward 5%. This spike follows fresh threats from former President Donald Trump, who vowed to impose sweeping tariffs on the European Union and Apple Inc. These geopolitical tensions have reignited demand for gold as a safe haven, a traditional response to rising uncertainty.

According to a Bloomberg report, Trump’s proposed 50% tariffs on EU goods and a minimum 25% tariff on Apple if it fails to manufacture in the U.S. rattled financial markets. U.S. equity futures dropped in response, highlighting investor unease. At the same time, bullion prices surged as traders sought refuge from the volatility.

But tariffs alone don’t explain why gold is hovering so close to record highs without a typical retracement. Several structural shifts underpin the resilience of gold in this cycle.

First, gold is being buoyed by deep concerns over U.S. fiscal health. Moody’s recently downgraded the U.S. credit rating, citing fears that the government’s ballooning deficit—exacerbated by Trump’s tax proposals—could worsen. With trust in government debt shaken, gold has gained favor as a store of value.

Second, the usual inverse relationship between gold and Treasury yields appears to be breaking down. Yields on 10-year U.S. Treasuries have risen to around 4.5%, a level that would historically undermine gold, which offers no yield. However, this time, investors are prioritizing safety over returns. The desire to shield portfolios from political and economic instability is overriding traditional valuation models.

Third, the macroeconomic backdrop includes a weakening U.S. dollar, as evidenced by the Bloomberg Dollar Spot Index slipping 0.6% for the week. A softer dollar makes gold cheaper for foreign buyers, further boosting demand.

Finally, investor psychology has shifted. Gold’s surge of over 25% this year has created a momentum-driven market where fear of missing out (FOMO) is fueling further buying. This sentiment-driven rally leaves little room for retracement, especially when headlines continue to reinforce the bullish narrative.

In conclusion, gold’s current strength—so close to its peak with little sign of reversal—reflects more than just a temporary flight to safety. It signals a deeper lack of confidence in traditional hedges like government bonds and an increasingly uncertain geopolitical environment. Until those pressures ease, gold may not follow the rules of a “normal” market cycle.