Gold has rarely glittered quite this brightly. After a year in which the metal has surged about 60%, setting roughly 40 new record highs, investors have been piling in… and not just into bullion.
Silver, platinum and gold miners have all been caught up in the rush as traders search for extra leverage to the rally.
UBS thinks some of this enthusiasm is starting to look overheated. The bank says sentiment toward gold has become “excessively” bullish in the short term, though it does not see the conditions for a lasting downturn.
Positioning data, such as futures holdings and exchange-traded fund inflows, do not yet point to extreme crowding. The bank argues that the fundamental drivers for gold remain in place and that the next six to twelve months are likely to favour the bulls rather than the bears.
In particular, UBS points to the macro backdrop. The last five gold bear markets of the past half-century all took place when the US dollar was strengthening, inflation was falling, growth was improving, and investor anxiety was easing.
The bank expects the opposite of those conditions this time around. It also sees continued buying by central banks, even at higher prices, as part of a broader trend towards diversification away from the dollar; what analysts refer to as the “de-dollarisation” trade.
For investors in gold miners, it has already been a golden year. The GDX index of producers has more than doubled in 2025, outperforming the metal itself by around 70%.
That follows several lean years when operational missteps, inflation, and falling valuations weighed on the sector. Even after this rebound, UBS says the shares are still not expensive.
Valuations on earnings and cash flow are roughly in line with 2019 levels, while free cash flow yields are higher and most balance sheets are now net cash.
The re-rating, though, means the easy money may have been made. Multiples such as enterprise value to earnings before interest, tax, depreciation and amortisation, a standard measure of profitability, have risen back to about 8.5 times for the GDX, the same as in 2019. Still, UBS believes risk and reward remain favourable.
With most companies showing improved reliability, stronger free cash flow and rising dividends, the sector’s recovery looks more grounded than the speculative spikes of the past.
UBS has nudged up its valuation multiples and target prices across the board, lifting its price targets by 3–20% while keeping its positive stance on the sector. Among individual names, Barrick Gold is highlighted as a turnaround story, with asset sales and cash generation improving.
Endeavour Mining PLC listed in London, is also favoured after a tough 2024, helped by stronger production and lower spending.
The bank remains supportive of Newmont, Kinross and Franco-Nevada, each expected to benefit from improving returns and operational recovery. Agnico Eagle and Wheaton Precious Metals, by contrast, are rated more neutrally after strong outperformance.
In UBS’s view, gold has moved from a value play to a momentum trade. But with the macro backdrop still supportive and miners finally rebuilding investor trust, the metal’s bull run though perhaps over-enthusiastic, does not look ready to fade just yet.
