Gold and silver has been in the spotlight this year. A multitude of factors fueled gold’s impressive rally, ranging from heightened geopolitical risks, U.S. monetary easing, jitters ahead of the U.S. Presidential election and central bank buying. Gold hit an unprecedented high of $2,790 an ounce this October. Gold has yielded 28% year-to-date growth, outpacing stocks, bonds and commodities. The bullion seems headed for its largest annual gain from the 29.5% reported in 2010. Silver has also gained 27% so far this year on safe-haven demand and is set to reverse the 1.2% loss witnessed in 2023. Silver peaked at $35 an ounce in October — the first time since 2012.
This momentum is expected to continue in 2025, with gold and silver prices likely to be supported by ongoing geopolitical uncertainty and concerns over President-elect Trump’s agenda, specifically regarding tariffs. To capitalize on these trends, we suggest adding mining stocks like Pan American Silver PAAS, Fresnillo FNLPF, Coeur Mining CDE, New Gold NGD and Fortuna Mining Corp. FSM. These companies, backed by positive estimate revisions and strong earnings growth prospects for this year and the next, are well-positioned to sustain their upward trajectories and enhance returns in 2025.
Per the World Gold Council, total gold demand (including over-the-counter transactions) in the first three quarters of 2024 rose 3% year over year. The third quarter saw a record demand of 1,313 tons, with demand value exceeding $100 billion for the first time ever.
Central banks continue to add gold to reserves. Bar and coin investment remained solid at 859 tons in the first nine-month period of 2024, higher than the 10-year average of 774 tons. Bar and coin investment value reached a record $63 billion for the first three quarters of 2024. Geopolitical risks, concerns about an economic slowdown and the gold price surge fueled these strong numbers. Bar and coin demand in India jumped to its highest third quarter since 2012.
Total investment demand climbed 22% year over year in the three quarters of 2024. Global physically-backed gold ETFs witnessed inflows of 95 tons in the third quarter, breaking the nine-quarter stint of outflows.
However, high gold prices took a toll on jewelry demand, which was the lowest in the third quarter. India has been a notable outlier, as a cut in gold import duties in July led to higher jewelry sales. Technology demand has moved up 9% year over year in the first nine months of 2024, led by the electronic sector. Increasing adoption of 5G-enabled smartphones led to higher gold use in the wireless sector. The proportion of smartphones compatible with generative AI (GenAI) and featuring WiFi-7 has also increased. These shipments are expected to make up 20% of the market by the end of 2024.
The Federal Reserve announced another interest rate cut of 25 basis points yesterday, which was expected. Gold and silver prices dipped on its hawkish signal of fewer rate cuts in 2025. However, gold soon regained ground at around $2,600 an ounce and silver at around $29 per ounce. Despite this, gold is set to end 2024 on a solid note, aided by central bank buying, bar and coin investment, and geopolitical tensions. Also, jewelry demand in India is seasonally strong in the latter part of the year due to festive and wedding-related buying.
Coming to silver, global industrial demand is expected to rise 7% and surpass 700 million ounces in 2024 for the first time on record. Growth is expected to be driven by green economy applications, particularly in the photovoltaic sector. Global silver demand is expected to rise 1% year over year to 1.21 billion ounces, while supply is expected to dip 1%. This suggests a fourth consecutive year of deficit for the silver market, which is likely to bolster prices.
Although the gold price reached record highs in 2024, analysts expect it to scale up further and reach $3,000 an ounce in 2025. All eyes are on Trump as he starts his second term next year. However, it has also led to some concerns regarding tariffs, which bodes well for safe-haven assets like gold and silver. The actions of the Fed and the direction of the U.S. dollar will continue to be important drivers.
Gold demand in India will remain strong on improving economic momentum and consumer confidence. India’s silver imports are expected to increase due to rising demand from the solar panel industry and investment demand. Demand from the world’s biggest silver consumer could boost silver prices.
We have taken the help of the Zacks Stocks Screener to shortlist five mining stocks that currently sport a Zacks Rank #1 (Strong Buy) or 2 (Buy), and have upbeat earnings growth projections for this year and the next.
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Coeur Mining: The recently expanded Rochester silver-gold mine in Nevada is on track to achieve its full-year production targets of 4.8-6.6 million ounces of silver and 37,000-50,000 ounces of gold. It can potentially be one of the world’s largest open-pit heap leach operations. Exploration success continues at Silvertip and Kensington, which bodes well for the company’s long-term growth. The highlights from surface and underground expansion drilling completed last year continue to support Silvertip’s status as one of the world’s highest-grade, undeveloped carbonate replacement deposits. CDE recently announced an agreement to acquire SilverCrest Metals in an all-stock transaction with an implied value of $1.7 billion. The acquisition is anticipated to close in the first quarter of 2025, and is expected to materially enhance its cost and cash flow profile, and accelerate its de-leveraging initiative.
The Zacks Consensus Estimate for CDE’s fiscal 2024 earnings suggests a year-over-year upsurge of 165%, and the same for 2025 indicates a rally of 311%. The consensus estimate for 2024 and 2025 has moved up 88% and 55%, respectively, in the past 90 days. CDE has a trailing four-quarter earnings surprise of 46%, on average. The CDE stock has soared 77% so far this year. The company currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pan American Silver: The company’s acquisition of Yamana Gold in 2023 was a transformational and strategic transaction that strengthened its position as a leader in silver and gold production in Latin America. This deal added long-life, low-cost assets and boosted the company’s portfolio to 12 operating mines. PAAS is on track to drive growth in silver and gold production in 2024, with a full-year contribution from the acquisition and higher production at La Colorada following the completion of a ventilation infrastructure in mid-2024. The company recently completed the sale of the La Arena to Zijin for $245 million in cash consideration. PAAS was also granted a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II project.
The Zacks Consensus Estimate for the company’s fiscal 2024 earnings indicates a year-over-year surge of 525% and 96.3% growth for fiscal 2025. The consensus estimate for 2024 has moved up 34% in the past 90 days and the same for fiscal 2025 has risen 16.5%. PAAS currently carries a Zacks Rank #2. The PAAS stock has gained 24.8% year to date.
Fortuna Mining: The company is on target to produce 343-385 thousand ounces of gold in 2024 and 4-4.7 million ounces of silver. Gold-equivalent ounces are expected to be 457,000-497,000. The range indicates a year-over-year increase of 1-10%. Capital allocation priorities for 2024 aim to enhance balance sheet flexibility through debt reduction and funding aggressive organic growth programs, with a focus on the Diamba Sud project and the Séguéla Mine. The company’s strategy focuses on maximizing production while maintaining operational efficiencies to lower cash costs. Its disciplined approach to seeking new deposits or pursuing mergers and acquisitions will drive growth.
The Zacks Consensus Estimate for Fortuna Mining’s 2024 bottom line suggests year-over-year growth of 118% and that for 2025 indicates a rise of 17.7%. Over the past 90 days, the consensus estimate for 2024 and 2025 has moved up 2% and 12%, respectively. The company has a trailing four-quarter earnings surprise of 53.6%, on average. FSM currently carries a Zacks Rank of 2. The FSM Stock has gained 12.2% so far this year.
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Fresnillo: Silver-equivalent ounces are expected to be 101-112 million in 2024. This expectation includes attributable silver production of 55-62 million ounces (including Silverstream) and attributable gold production of 580 to 630 koz. The new Juanicipio project has now been fully ramped up and is expected to boost the company’s silver production while lowering consolidated group costs. Fresnillo is investing in several projects to boost production and ensure steady growth in the coming years. Its focus on improving operational performance and efficiency is expected to reduce costs. FNLPF’s high-quality assets, ample mineral resources, competitive margins and disciplined approach to development will continue to drive growth.
The Zacks Consensus Estimate for Fresnillo’s 2024 and 2025 earnings has moved up 7% and 13%, respectively, in the past 90 days. The consensus estimate suggests year-over-year growth of 45.2% for 2024 and 77% for the next year. FNLPF currently carries a Zacks Rank #2. The FNLPF stock has gained 6% year to date.
New Gold: Backed by the solid performance in the third quarter, gold production in 2024 is expected to be 300,000-310,000 ounces. New Afton gold production is likely to be at the top end of the guidance of 60,000-70,000 ounces, and production at Rainy River is anticipated to be 230,000-240,000 ounces. The fourth quarter is expected to be NGD’s strongest quarter of the year, concluding a successful year that has seen the company reach its free cash flow inflection point and deliver on project milestones in pursuit of its objective to create a sustainable production platform of approximately 600,000 gold equivalent ounces per year until at least 2030.
The Zacks Consensus Estimate for New Gold’s 2024 and 2025 earnings has moved up 50% and 13%, respectively, in the past 90 days. The estimate suggests year-over-year growth of 157% for 2024 and 46% for the next year. NGD carries a Zacks Rank #2 at present. The stock has surged 71% year to date.
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