Gold costs are at the moment buying and selling at greater than US$3,650 per ounce. That is 9% greater than one month in the past, 21% greater than six months in the past, 41% greater than one yr in the past, and 86% greater than 5 years in the past. Clearly, gold is having a critical run. Accordingly, and as anticipated, this has meant that gold shares have been hovering as nicely.

Let’s take a more in-depth look with the intention to resolve whether or not to promote into this power or to carry.

What’s been transferring gold costs?

There are just a few elements that have a tendency to maneuver gold costs over time. The primary is excessive inflation. Gold is taken into account a hedge towards inflation. It’s because the availability of gold is comparatively fixed, so its worth can also be comparatively fixed. Principally, it’s a good preserver of worth.

The second is a weakening of the U.S. greenback. As gold is priced in U.S. {dollars}, a weakening of the greenback makes gold inexpensive to purchasers across the globe. Therefore, demand for gold would theoretically rise, pushing up costs.

Lastly, gold is considered as a secure haven. Geopolitical issues and uncertainty, fears of recession, and basic investor nervousness go a great distance in boosting gold costs. That is precisely the kind of atmosphere that we’ve been experiencing for fairly a while now. Buyers have due to this fact been flocking to gold with the intention to tackle their skittishness and purchase themselves some peace of thoughts.

Agnico-Eagle Mines

I’ve made it no secret that my favorite gold inventory is Agnico-Eagle Mines (TSX:AEM). The rationale for that is the easy undeniable fact that Agnico has taken very deliberate steps to reduce its threat profile. This all begins with the corporate’s determination to focus its operations in politically secure, pro-mining jurisdictions. These jurisdictions embrace Canada, Europe, Latin America, and america.

This has set Agnico up as an organization that’s resistant to the elevated nation threat that many different gold firms face. In my opinion, there are sufficient dangers on the market, and I don’t wish to add nation instability to the record. So, I’ve been recommending Agnico-Eagle’s shares for fairly a while now, and it has been a peaceable, stress-free trip to a greater than 580% return over the past 10 years.

However Agnico-Eagle has not solely benefited from this safety and the hovering gold costs; the corporate has additionally benefited from its sound enterprise practices. These sound and conservative enterprise practices have resulted in sturdy money stream and dividend progress over the long run.

Since 2020, Agnico’s money stream from operations has elevated greater than 230% and its free money stream has elevated 390% to US$2.1 billion. Additionally, Agnico’s dividend has elevated by roughly 190% to the present US$1.60 over the past 10 years.

The underside line

It’s at all times exhausting to know when to promote an outperforming inventory or sector. However presently, the U.S. greenback has continued to weaken in 2025, which bodes nicely for gold costs. Additionally, uncertainties and dangers stay excessive within the world economic system. Lastly, traders stay cautious and risk-averse. This units up gold costs and shares for an additional good yr.

I’d think about taking some income off the desk, however I’d proceed to carry gold shares presently.