Gold mining stocks outperform chip makers rally despite AI boom

Despite all the hype around artificial intelligence and the rise of semiconductor stocks in 2025, gold miners' securities turned out to be a much more profitable investment, Bloomberg points out. At the same time, they are still relatively cheap.

The MSCI Gold Miners Index has risen 135% since January, following the rise in precious metal prices. Its gap in returns from the index of leading semiconductor producers in 2025 may be a record, Bloomberg writes. The latter has added 40%. This difference emphasizes a key trend in global markets this year: while the fear of missing out on profits (FOMO) makes investors chase assets related to artificial intelligence, they are also attracted by the unrelenting rally of gold, the agency notes.

Shares of Newmont and Agnico Eagle Mines, heavyweights of the MSCI Gold Miners Index traded in New York, have more than doubled in price since the beginning of 2025. Shares of Zijin Mining Group in Hong Kong jumped more than 130%, outpacing even Alibaba, an investor favorite in China's AI market.

"Betting on gold and gold miners is one of my top medium-term investment ideas," says Anna Wu, multi-asset strategist at Van Eck Associates. The precious metal itself is attractive as a defensive asset, and mining players, in addition, benefit from rising profitability and a revaluation of their business, she says.

Current valuations of companies in the precious metals sector are much less concerning than in the technology sector. The securities of global gold miners in the MSCI index are trading at an average of 13 times forward P/E (forward P/E) - slightly cheaper than the five-year average. At the same time, the average multiple of shares in the chipmakers' index is 29 - this is significantly higher than the five-year average, Bloomberg states.

"Even after a near-vertical surge in the yellow metal's prices, [gold miners'] equity multiples look low as their earnings have been growing faster than quotes," the agency quoted Charu Chanana, chief investment strategist at Saxo Markets in Singapore, as saying. - If gold prices remain near record levels, cash flow calculations will continue to point to high margins".

Gold itself has soared in value by more than 45% in 2025 and may show the best annual result since 1979. In addition to purchases by central banks, the metal is supported by the Fed's rate cuts, the trend towards de-dollarization and the growth of investments in gold-backed exchange-traded funds (ETFs). The unexpectedly strong inflow of funds into them exceeded Goldman Sachs' expectations - the bank warned that it could push prices higher than indicated in its baseline scenario, which assumes the price of gold to $4000 per troy ounce by mid-2026 and to $4300 by the end of next year.

Bloomberg calculates that in July-September this year, investor interest allowed gold mining companies to raise a record $6.7 billion in the quarter from share sales - through IPOs, private placements and large (block) package deals.

This article was AI-translated and verified by a human editor