Gold miners dominate 2025 markets with 126% rally as investors rush to safe havens

Gold miners are destroying the competition in 2025. Bitcoin is down. AI stocks are lagging. But gold? It’s on fire. The S&P Global Gold Mining index has jumped 126% since January, making it the best-performing sector across all S&P categories.

This insane rally in gold mining stocks is tied directly to the metal’s own boom, with gold prices shooting up 52% since the start of the year.

That means names like Agnico Eagle, Barrick Mining, and Newmont are making more money than they know what to do with. “It’s been a very good year for gold stocks,” said Imaru Casanova, a portfolio manager at VanEck. “They have more cash than they know what to do with.”

These companies have seen their profits explode because most of their production costs are fixed. So when gold prices jump, all that extra value goes straight to the bottom line.

Miners bank cash but face old ghosts

But not everyone’s cheering. There’s real fear that this rush could fall apart, just like it did after the 2008 financial crisis. Back then, a similar gold rush led to a wave of bad decisions: mergers that made no sense, rising production costs, and fat bonuses for executives.

From the 2011 peak, gold miners crashed 79% in four years. Casanova added, “A lot of value was destroyed. In investors’ minds, it’s still fresh.”

And yet, here we are again, gold just passed $4,000 per troy ounce, boosted by central bank demand, a looming U.S. government shutdown, and rising panic over massive public debt. Investors are diving back into gold stocks, hoping this time will be different.

Meanwhile, bond markets are acting like everything’s fine. Despite gold’s insane run, bond traders aren’t pricing in high inflation. That’s weird. Usually, skyrocketing gold prices are a sign that people fear the government will inflate away its debt.

But long-term inflation expectations, based on Treasury breakevens, haven’t moved. They’re still close to the Fed’s 2% target.

Central banks load up while inflation signals split

There’s a gap here. On one side, you’ve got investors and central banks stocking up on gold, betting that politicians will let inflation rise instead of cutting spending. On the other side, bond markets seem relaxed, assuming inflation is under control.

In Japan, that bet worked. According to the IMF, Japan’s net debt fell from 162% of GDP in 2020 to 134% this year, even though it kept spending more than it taxed. In the U.S., it didn’t. Inflation rose, but net debt climbed from 96% in 2020 to 98% now.

Still, gold has climbed 51% over the past 12 months, while the dollar has dropped 10%. Stocks are up too, driven more by AI hype than inflation fears. But if this inflation trade—also called the “debasement trade”—catches on, things could flip fast. The two clearest plays are betting on deep rate cuts while dumping long-term Treasurys, or betting on inflation breakevens widening.

But the 30-year Treasury yield has stayed mostly in the 4.5% to 5% range. It’s lower than at the start of the year, and still below where it was before the latest gold surge six weeks ago. So even now, investors don’t seem to believe inflation will erode bonds.

Right now, everything’s split. Some investors expect a weak jobs market, pushing the Fed to cut rates. Others think the economy’s running hot, thanks to AI spending, which could trigger more inflation. If the Fed backs off rate cuts, all bets are off; stocks, bonds, and gold could all take a hit.

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