In the world of investments, gold is glittering brighter than ever, and savvy investors are wondering if they should still hop onto the gold bandwagon. According to a recent analysis, it seems the glittering gold rush is only just beginning. Starting the year at an impressive $2,600 per ounce, gold has surged to over $4,300 by year’s end, marking a staggering 65% return. But what’s really shining are the gold mining stocks, with the VANC Gold Miners ETF soaring by an astonishing 155%. With such dazzling numbers, one can’t help but ask—has the gold stock rally already peaked?
Enter Daniel Oliver, the head honcho at the Mermikin Gold Fund. Oliver isn’t just a casual observer sipping a cup of coffee while watching things unfold; he’s a die-hard gold enthusiast who firmly believes that the gold boom still has a long way to go. Recent research showed Oliver’s belief is not just a whimsical daydream; he argues that the usual pitfalls for gold miners, such as rising costs, might not be as significant as many think. In other words, the best is yet to come for gold and its mining pals!
Oliver referred to the past to support his arguments. During the bubble years, gold wasn’t exactly the star of the show. Big tech and Bitcoin took the spotlight, leaving gold in the dust. However, he noted that as we ventured into 2025, a significant shift occurred. Speculative trades began to cool off, and gold reclaimed its rightful place at the head of the table. Not only did gold start to shine more brightly, but mining stocks also joined in on the fun.
The stage is set for gold to become the top performer, especially in a tightening credit environment. As the Federal Reserve throws in the towel on short-term rates while also seeing a hike in yields for 30-year Treasury bonds, the financial scene feels a little shaky. This combination suggests that credit growth may not boom as expected, allowing gold prices to flourish. Historical data backs this too—during the 1970s, gold prices skyrocketed by an impressive 1,400%, while industrial commodities like copper barely crawled along with a 45% increase.
As for the various costs miners face, Oliver sees bright skies ahead, as energy prices remain stable due to increased U.S. supply and weakening demand growth. Since energy is a major ingredient in mining, this gives gold miners a protective cushion against rising costs. Therefore, if gold prices continue to outpace their mining input costs, profit margins could actually swell like a hot air balloon at a summer fair!
In Oliver’s eyes, the stellar performance of gold mining stocks in 2025 shouldn’t sound alarm bells but rather ring in the exciting start of a new bull market. With all these factors swirling together, it’s safe to say that gold may still be a shiny investment option worth considering. So, for those thinking about diving into the world of gold stocks, it seems the golden era may be just warming up!
