Gold posted its strongest quarterly gain in nearly 40 years, closing the first quarter of 2025 at a record $3,150.30 per ounce — a 19.3% rise for the quarter. This performance is the best since the third quarter of 1986, and the metal has already recorded 18 new all-time closing highs this year.
Two primary factors are fueling gold’s advance:
- Central bank purchases: Several central banks, notably China, have increased their gold reserves to reduce reliance on the U.S. dollar after geopolitical events and freezes of foreign assets prompted a reassessment of reserve diversification.
- Robust retail demand: Consumer interest has surged, with physical gold products like bars selling strongly at major retailers and investors allocating fresh capital to gold-backed ETFs.
Gold mining stocks have outpaced the metal itself. The VanEck Gold Miners ETF has risen roughly 34% year to date, reversing a decade of underperformance: miners lagged gold by about 17% over the past ten years, but this trend has flipped in 2025.
From a valuation perspective, analysts consider gold miners attractively priced. The sector currently trades at around 14 times forward earnings, below its 10-year average near 20. Analysts at major banks expect earnings estimates for mining companies to move higher if elevated gold prices persist. For investors seeking individual exposure, large, diversified producers such as Newmont and Barrick are commonly recommended for their scale, production profiles and balance sheets.
That said, some caution is warranted. Gold has been in a pronounced bull market since September 2022. Sharp gains can invite profit-taking, and periodic corrections are likely if early investors decide to realize gains. Investors should weigh gold’s role in portfolio diversification against the potential for short-term volatility.
Overall, the current environment — central bank buying, strong retail demand and higher metal prices — supports a constructive outlook for both physical gold and many mining equities, while acknowledging the risk of intermittent pullbacks amid heightened market enthusiasm.