Gold, Silver and Mining Companies: is there more room to grow?
19 AUG, 2025
By Ned Naylor-Leyland
By Ned Naylor-Leyland, Investment Manager, Gold & Silver Team, Jupiter Asset Management
The gold price in US dollars, adjusted for inflation, has broken out of a 43-year bear market — a move with significant consequences for silver prices and for gold and silver mining companies.
The latest rally in gold, which reached a fresh all-time high in June, reflects several drivers: the Trump administration’s support for a weaker US dollar, concerns over the health of US public finances, the safe-haven role of US Treasury bonds, geopolitical uncertainty, and interest rate expectations.
The US dollar fell nearly 11% against a basket of currencies in the first half of the year — its worst performance since 1973. Uncertainty around Trump’s tariff and budget plans is unlikely to fade soon. His so-called Big, Beautiful Bill, signed on 4 July, is expected to add between $2.4 and $2.8 trillion to US debt over the next decade.
We believe we are witnessing an accelerated erosion of the purchasing power of fiat currencies. Like the dollar, the pound sterling, yen, and euro have also lost value against gold in recent months.
While many investors are familiar with gold, fewer fully appreciate the opportunities in two related assets: silver and shares of mining companies that extract these precious metals.
Silver scarcity
Silver is a monetary metal with higher volatility than its cousin gold. With a higher beta, it tends to follow gold’s price moves with sharper rises and steeper falls. What stands out most is its structural scarcity.
Beyond its role as a store of value, silver is a crucial industrial metal, with the highest electrical conductivity of any element. More than 60% of global silver supply is consumed by industries such as electronics, advanced batteries, solar panels, plasma screens, as well as growing medical and military applications.
Industrial demand for silver rose 4% in 2024 to 680.5 million ounces, a new all-time high for the fourth consecutive year. Demand has exceeded supply for four years running, according to the Silver Institute.
Unlike gold, there are no large reserves of silver. Its price has climbed in line with gold this year (+27% vs +26%), yet it remains well below its historical high of $50/oz from 1980. More capital inflows are needed to push silver higher, and we believe the first signs of this are emerging.
Mining Companies pumping cash
This brings us to gold and silver mining companies, which typically perform strongly in equity markets during periods of rising metal prices. At present, miners are generating significant cash flow.
Like silver, mining stocks are “high-beta plays” — more volatile than gold and often moving later in the cycle. Mining shares have surged in 2025; the VanEck Gold Miners ETF rose 54% in the first months of the year. Yet ETFs have seen outflows in recent quarters, a puzzling trend given the strong fundamentals.
Mining company profits are rising, and valuations remain attractive: below long-term averages on both price-to-cash-flow and price-to-net-asset-value metrics. We expect long-only investors to return to the sector soon — operations are simply too strong to be ignored.
The same applies to gold and silver, where ETF positions remain below their 2020 (gold) and 2021 (silver) peaks.
Our strategy has maintained a bullish stance in the sector for over a year. We believe it makes sense to enhance returns by adding silver and mining equities alongside gold exposure.
The role of Precious Metals in portfolios
Gold and silver are real money: governments and central banks cannot print them. Meanwhile, silver and precious metals miners are effectively the “higher-beta cousins” of gold.
We believe gold, silver, and mining stocks all have a crucial role in a well-diversified investment portfolio, particularly in today’s macroeconomic and market environment.
