The gold price continues to reach new highs and while the share prices of producers has finally started to catch up, history suggests there’s further to go.
Incrementum’s In Gold We Trust monthly report noted that while bullion continued to rise last month, it was miners that “stole the show” in August.
“In August 2025, gold rose 4.8% and silver 8.0% – very impressive moves in their own right,” it said.
“But miners went parabolic, with all four ETFs that we track soaring more than 20%, lifted by a powerful rally that swept across both gold and silver equities.
“This surge has now propelled mining stocks to overtake bullion in terms of performance over the past two years, albeit with added risk and much more price variation.
“Nevertheless, the momentum suggests that this rally in the mining space is only just getting started.”
Incrementum managing director, partner and fund manager Ronnie Stöferle will further discuss the outlook for mining equities in his keynote address to the Mining Forum Americas in Colorado Springs on Monday morning.
Miners trading below highs
Sector leader Newmont Mining (NYSE: NEM) has had a good year, more than doubling since January, but is still cheaper than what it was trading at in 2022 – before the acquisition of Newcrest Mining.
Shares in Barrick Mining Corporation (TSX: ABX) are up by around 75% this year, but at just over C$40, are below the previous bull market high of more than C$50.
The outlier is Agnico Eagle Mines (TSX: AEM), which has almost doubled this year and, like the gold price, is hitting regular all-time highs.
The company’s market capitalisation has surged through the C$100 billion mark.
Bell Potter Securities this week pointed to the underperformance of Australian gold equities.
“Specifically, the disconnect that has emerged between ASX-listed producers and the North American/global names that dominate the offshore indices,” the firm said on Tuesday.
“Turns out that this disconnect is a significant departure from historic trading patterns. Looking back, the only disconnect in the last 10 years is the two-way volatility (which quickly reverted) at the onset of the COVID pandemic.”
Analyst David Coates suggested one reason could be the release of softer 2026 financial year guidance but argued that higher costs and soft production growth was also being seen in North American stocks.
“We also don’t see that exchange rate differentials, concerns around capital allocation, jurisdiction exposures, tax-loss selling on the ASX or increasing labour and power costs provide a fundamental or sustainable justification for this underperformance,” he said.
“We see two key implications: 1) strong relative performance catch up by ASX golds, and 2) inbound M&A.”
ASX leader Northern Star Resources (ASX: NST) hit an all-time high in April but currently sits around 10% below that level.
Generalists to get involved?
A key catalyst for gold equities would be increased participation by generalist investors.
“I think it's been a bit slow on the uptake by generalist investors,” OCM Gold Fund portfolio manager Greg Orrell told the Money of Mine podcast last week.
“Really, if you look back at how this year has gone, every quarter you've seen an increase in the gold price, and though the price of the shares have gone up, you really haven't gotten the enthusiasm that would be typically associated with bull markets.”
Orrell said part of the reason was the strong performance of the broader market, including cryptocurrencies and technology stocks.
“I look at where we're going, there's more room to run – obviously, sitting in my seat, I'd like to think that,” he said.
“I still look at it and believe that we're going to see more retail, we're going to see more institutional investors come into the space, and you'll see these margins start to press out.”
Looking at previous cycles, Orrell said the bull market in equities often came after the gold price had peaked.
“I still think what's going to happen is, we're going to settle at a gold price, once the US can get its debt situation squared away, is we're going to get a gold price that stabilises at a pretty significant level,” he said, adding that the consensus view still seemed to be that gold wouldn’t hold above US$3000 an ounce.
“I think right now, when you start looking at these gold shares, they're starting to get a feeling of ‘okay, US$3300, US$3400, that's a that's a good base, so we're just kind of just getting our feet wet.”