Gold prices have risen 19% so far in 2025 and are at historical highs. Tailwinds include a flight to safety on falling share markets, tariff worries, geopolitical instability, a weaker US dollar, and rising inflation expectations. Central bank buying is strong and ETF flows are positive.
Why it matters: We update our gold price forecasts. Based on the futures curve, we now assume gold averages $3,170 per ounce from 2025 to 2027, up from around $2,810. We also raise our assumed midcycle gold price to $2,000 per ounce from 2029, up from $1,820.
This is based on our updated estimate of the marginal cost of production. Inflation has pushed up and steepened the gold industry cost curve in recent years, and this is likely to continue in the near term. Given high prices, miners are focused on maximizing production rather than cost control.However, we think central bank purchases will normalize and ETF flows, which tend to be procyclical, will likely return to broadly neutral. Along with increases in both mined and recycled supply in response to elevated prices, we expect a long-term price significantly below spot of $3,110.
The bottom line: Our increased gold price forecasts lift the fair value estimates of our gold mining coverage. Barrick Gold’s GOLD fair value estimate is up 7% to $23.50 per share. Agnico Eagle Mine’s AEM estimate is up 7% to $62 per share. Newmont’s estimate has risen 8% to $55 per share, while Kinross’ is up 8% to $7 per share.
Big picture: Barrick is the cheapest of our gold coverage, trading 16% below its updated fair value, while Newmont NEM is undervalued by 12%. Both miners are suffering from disappointing production and elevated unit cash costs, but we think these issues are temporary.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.