The sharp pullback in gold mining stocks has created a compelling buying opportunity, that's according to JP Morgan, with the broker arguing the sector’s recent slump fits a familiar market-shock pattern rather than signalling any breakdown in gold’s safe-haven case.
The bank, in a note, highlighted that gold has fallen about 11% since the start of the US-Iran conflict, while gold miners, as tracked by GDX, have dropped around 20%. Whilst that has unsettled some investors, JPM pointed to previous periods of acute stress, which the bank says have often produced a similar setup, with miners tending to rebound strongly once bullion finds a floor.
JPM's analysis suggests gold miners have rallied by an average of around 80% in the six months after gold troughs in earlier shock episodes.
The longer-term case for gold remains firmly in place, underpinned by de-dollarisation, reserve diversification and mounting global debt and deficits, it added.
Analysts also pointed to a shift in interest rate expectations, saying earlier concerns over US rate hikes have now reversed, with its economists expecting the Federal Reserve could lean more dovish given mounting risks to growth and employment. The bank continues to forecast a year-end 2026 gold price of US$6,300 an ounce, around 35% above spot levels.
Against that backdrop, the broker said EMEA gold miners still look attractively valued at roughly 5 times spot EV/EBITDA and around a 10% free cash flow yield. AngloGold and Fresnillo remain its top picks, both rated overweight, with JPM highlighting their strong cash return profiles and scope for a re-rating. The bank has, however, trimmed its near-term gold assumptions to reflect the latest forward curve, cutting its 2026 and 2027 forecasts by 6% and 5% respectively to US$4,800/oz and about US$5,100/oz.