UBS says gold mining stocks are rebuilding investor trust in 2025, with GDX up 40% vs gold, driven by buybacks, M&A growth, and strong balance sheets.

Gold Mining Stocks Rally in 2025 as UBS Sees Investor Confidence Returning

Gold mining stocks are finally shining brighter than the metal they extract. In a note released Tuesday, UBS analysts led by Daniel Major said gold miners are “starting to rebuild investor confidence/trust” after years of underperformance.

According to UBS, this resurgence is backed by healthy balance sheets, accelerating share buybacks, and a stable-to-positive gold price environment.

Gold Miners Outperform Gold Prices in 2025

For the first time in years, gold mining equities are beating gold itself. The VanEck Gold Miners ETF (GDX) has outperformed the gold price by more than 40% in 2025, and by 15% in the past three months, despite gold prices remaining relatively flat.

Top Gold Stock Performers in the Last 90 Days

UBS highlighted several major gold mining stocks that have delivered impressive returns over the past three months:

• Gold Fields (GFI) – +40%
• AngloGold Ashanti (AU) – +30%
• Newmont Corp (NEM) – +30%
• Kinross Gold (KGC) – +25%

This surge reflects strong earnings visibility and renewed market confidence in miners’ financial discipline.

Why Balance Sheets Are the Key Driver

UBS stressed that miners have deleveraged significantly over the past decade, leaving them in a much stronger financial position:

• Minimal debt and healthy cash reserves.
• Ability to self-fund expansion projects.
• Greater flexibility for buybacks and dividends.

If gold prices stay in their current range, UBS expects the pace of buybacks to accelerate in the second half of 2025.

Improving Project Economics and IRR

The long-term outlook is also favorable. Gold price assumptions are rising faster than costs and capital spending, improving miners’ internal rates of return (IRR).

This environment supports sustainable production growth without the debt-heavy expansions that have plagued the sector in past bull markets.

M&A Set to Heat Up in the Gold Sector

UBS predicts mergers and acquisitions will pick up pace in 2025 as companies seek to:

• Secure long-term reserves amid falling ore grades.
• Gain operational scale to manage costs better.
• Use cash reserves for deals instead of issuing new shares.

Speculation is already circulating about potential tie-ups among mid-tier and major gold miners.

Gold Miners’ Leverage to Gold Prices

Gold mining stocks have historically offered leveraged exposure to gold prices, rising faster than the metal in bull markets. The 2025 rally has shown this effect even without major gold price moves.

If spot gold breaks out from its current range, miners could see another strong leg up in share prices.

Technical Analysis: Price Levels to Watch

• GDX ETF: Holding above $35 could lead to a move toward $40–$42 resistance.
• Gold Fields (GFI): Strong momentum above $16, next resistance near $18.
• Newmont (NEM): Needs to hold $45 to maintain its uptrend.

Macro Environment Still Supports Gold

Several global trends are keeping gold attractive:

• Central banks continue to buy at record levels.
• Geopolitical tensions are fueling safe-haven demand.
• Inflation concerns remain despite easing in some economies.

This stability in gold prices gives miners room to grow without major price risk.

Risks to Watch for Investors

While the sector’s outlook is strong, potential headwinds include:

• A sharp decline in gold prices.
• Rising energy and labor costs.
• Regulatory changes in mining-heavy countries.

Gold Stocks Back in the Spotlight

UBS’s analysis signals a sector that has regained investor trust. With buybacks accelerating, M&A heating up, and financial discipline intact, gold miners could be entering a multi-year period of outperformance.

For investors seeking exposure to gold’s upside with leverage, 2025 may be the year mining stocks reclaim their status as a go-to investment.