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Generally speaking, global gold stocks have soared in 2025 as yellow metal prices have continued to take off. Bullion values are up 43% since 1 January and have hit dozens of new daily highs in the process.
There’s no guarantee gold will keep rising. However, long-term drivers indicate this rally is no flash in the pan, unlike with more volatile assets like cryptocurrencies. The bull run stretches back to 2005, boosted by forces such as inflation fears, rising geopolitical tensions, and strong investor and central bank demand.
Analysts see scope for further juicy gains too, on the back of US-specific risks alone. Analyst Arnab Das of Invesco has said “we think the gold rally has legs even from record highs,” noting that gold is now rising as the US creates risk in efforts at radical domestic and global reform; US growth slows, inflation is sticky; the administration attacks the Fed and other institutions; and DXY (the US dollar index) falls.
Das added that “we see no true alternative to gold as a hedge against US risks and expect central banks to keep buying gold.”
Choosing gold shares
With other macroeconomic and geopolitical risks spooking investors, opening a position (or boosting existing exposure) in the yellow metal is worth serious consideration in my book.
I’ve done this myself by purchasing the L&G Gold Mining ETF (LSE:AUCP) — which holds shares in 37 different metal producers — for my portfolio. Tracking gold stocks instead of the metal price itself carries greater risk. But this tactic also carries significant growth potential during bull markets.
The rise of the NYSE Arca Gold Miners Index in 2025 illustrates the potential benefits. It’s almost doubled in value since New Year’s Day.
This outperformance reflects the operating leverage that miners enjoy. Their production costs are generally fixed, and so every small rise in the gold price goes straight to their bottom lines, leading to profits that grow faster than revenues.
A top ETF
That L&G exchange-traded fund (ETF) I hold has risen 107% in value since 1 January. And I believe it can keep rising for the reasons described.
As I mentioned, investing in gold stocks is riskier than tracker funds or physical metal. Even if bullion rises, returns can disappoint if producers suffer setbacks pulling ore out of the ground, for instance, or suffer other operational issues.
However, with a broad portfolio the L&G Gold Mining ETF spreads this risk out. Major holdings (like Newmont, Agnico Eagle and Gold Fields) enjoy significant scale and financial strength that helps them weather setbacks too.
And with mines spanning the globe — including major gold-mining regions in The Americas, Australia and Africa — the fund’s portfolio is geared to cut the risks of regional problems pulling down returns.
The ETF has delivered an average annual return of 13% during the last half a decade. I like the way it balances risk and reward, and plan to hold it for the long haul.
