A powerful rally in gold miners is turning heads on Wall Street, with the industry, as broadly tracked by the VanEck Gold Miners ETF (NYSE:GDX), up 50% year-to-date through April 22, outperforming nearly every other asset class around the world.
Fueled by gold prices soaring above $3,300 per ounce and robust investor demand, the industry enters first-quarter earnings season with high expectations and bullish momentum.
This week, Newmont Corp. (NYSE:NEM) and Agnico Eagle Mines Ltd. (NYSE:AEM) will kick off first-quarter 2025 reporting, with analysts anticipating a wave of strong cash flow, operational updates and capital allocation plans.
What's Driving The Gold Boom?
According to VanEck portfolio manager Imaru Casanova, a “perfect storm” is lifting gold: sticky inflation, rising global debt, escalating geopolitical tensions and growing recession fears.
"Gold thrives amid uncertainty," she said during a VanEck-hosted webinar Tuesday, highlighting the sector’s leverage to bullion. Gold equities, she added, have delivered "significantly amplified returns" compared to the metal itself.
Casanova noted that gold equities have sharply outperformed bullion, highlighting that the leverage embedded in mining companies gives investors an amplified return profile when gold rises.
With miners' all-in sustaining costs around $1,400 to $1,500 per ounce, today's gold prices north of $3,300 are delivering record margins.
"If we're at $3,000 gold and the costs are $1,500, that's a $1,500 margin per ounce," Casanova said. "That's where the cash flow is."
She also highlighted the rising interest in capital return strategies, such as share buybacks and dividends. "The companies are in great shape. That makes us even more bullish—not just because of the gold price, but because of company fundamentals."
Gold prices are up 42% over the past year and 18% over the past quarter, averaging $2,862 per ounce in the first quarter of 2025. In April, gold has surged another 8.9%, now trading above $3,400.
Monthly gold ETF demand hit a three-year high in April, signaling a potential resurgence of institutional and retail interest.
The VanEck team outlined several structural supports behind the gold rally, including strong demand from central banks, tariff risk and policy uncertainty.
With gold in "uncharted territory," Casanova said, "we could enter a much higher range" that supports even more robust margins and cash flows for miners.
Bullish Q1 Expectations From Wall Street
Bank of America raised target multiples and price objectives across its North American precious metals coverage this week in response to gold's strength. Analyst Lawson Winder now sees:
- Newmont at $70 (from $60)
- Agnico Eagle Mines at $159 (from $142)
- Barrick Gold Corp. (NYSE:GOLD) at $23 (from $19.50)
- Kinross Gold Corp. (NYSE:KGC) at $17.50 (from $15.00)
BofA expects free cash flow across its coverage to total $2.2 billion for the first quarter and $16.2 billion for the full year 2025, assuming gold averages $3,063 per ounce.
With all-in sustaining costs estimated around $1,500 per ounce, the sector is capturing historically wide margins.
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