Gold prices have surged significantly in the first quarter of 2025, reminiscent of the rise during the 1986 Chernobyl disaster. Analysts on Wall Street anticipate further gains for gold mining stocks. Gold futures closed at $3,150.30, marking a 19.3% increase for the quarter, the best performance since the third quarter of 1986. This year, gold has reached 18 record closing highs.
The demand for gold is primarily driven by central banks seeking to reduce reliance on the U.S. dollar and avoid financial sanctions amid geopolitical risks. Following the freezing of the Russian central bank's assets, many countries are reassessing their foreign exchange reserves. Retail investors are also actively purchasing gold, with gold bars becoming a hot commodity at stores like Costco (COST). Additionally, gold-backed ETFs are seeing significant inflows, with asset management scales increasing notably.
The VanEck Gold Miners ETF (GDX, Financial) has risen 34% in 2025, outperforming gold itself and potentially achieving its best quarterly performance since 2019. Although gold mining stocks have historically lagged behind gold, this trend might be reversing. Analysts suggest considering ETFs like iShares MSCI Global Gold Miners ETF (RING) or individual stocks like Newmont Corporation (NEM) and Barrick Gold (GOLD) for investment opportunities.
