With gold prices trading near record highs at $3,121 an ounce on Monday, investors are once again paying attention to the yellow metal – and the miners that produce it.
But while the headlines scream “all-time highs”, two leading investment banks are urging a more measured view.
Both RBC Capital Markets and UBS can see the yellow metal going higher, pointing to a toxic mix of geopolitical instability, fears of trade wars, and rising recession risks.
The rally, they say, is being driven not by robust fundamentals, but by a global wave of economic anxiety.
RBC has lifted its base case price forecast to $3,039 for 2025, with a peak scenario of $3,496 by year-end. UBS also sees room for further upside, although it warns that a good portion of the current price strength is already baked in.
Gold, both banks agree, is now largely trading on “vibes” – in other words, soft data like sentiment and policy uncertainty rather than concrete signs of economic slowdown.
To push higher from here, RBC argues, the mood music needs to turn into real noise: falling employment, weak output and hard evidence that the global economy is heading for trouble.
Still, for now, the rally has legs. Investor interest is rising again, with flows into gold exchange-traded funds (ETFs) picking up after a long period of stagnation.
Tariff concerns, in particular, are acting as a tailwind. RBC notes that any escalation in trade friction – especially with key events in April – could trigger another surge in demand for gold as a hedge.
UBS, for its part, sees earnings upgrades for miners coming through in the weeks ahead as analysts factor in higher realised gold prices.
However, it cautions that the sector still faces a credibility gap. A long history of overpromising and underdelivering has left investors wary. While gold itself has outperformed, many mining stocks have lagged.
That gap may now be closing. UBS points to the strong performance of the GDX Index of gold miners, which has outpaced the metal itself by around 20% year to date. But the bank warns this is no time for complacency: production slip-ups, cost inflation and poor capital discipline remain familiar pitfalls.
For UK investors, London-listed Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) stands out. The group had a tough 2024 but now appears to be at a “free cash flow inflexion point”, according to UBS.
With capital spending tapering off and higher gold prices lifting revenues, Endeavour could soon resume shareholder returns. Its Assafou project in Côte d’Ivoire also offers mid-term growth potential.
Among global names, UBS highlights Barrick Gold Corp. (TSX:ABX, NYSE:GOLD), Northern Star Resources Ltd (ASX:NST) and royalty firm Franco-Nevada Corporation (TSX:FNV).
Barrick offers solid value, with most of its risks already priced in. Northern Star has growth potential, particularly once its acquisition of De Grey is fully digested. Franco-Nevada provides exposure to the gold price without the operational headaches of running mines.
Both UBS and RBC agree on one thing: investor interest in gold is real, but fragile. Many potential buyers are waiting for a dip to build positions, while others are wary of entering at all-time highs. A period of consolidation might tempt more capital into the sector. But for a decisive move higher, the world’s soft economic signals would need to harden.
In other words, the case for gold is compelling – but still rests on a very human emotion: uncertainty. And while that may be gold’s greatest friend, it’s also its most unreliable one.