Eldorado Gold's Relative Strength Upgrade and Earnings Momentum: A Compelling Buy in the Gold Sector?

The gold mining sector has long been a barometer for global macroeconomic uncertainty, but 2025 has brought a new dynamic: the convergence of safe-haven demand for gold and energy transition-driven demand for copper. Against this backdrop, Eldorado Gold (EGO) has emerged as a standout performer, with its stock price surging 13% since February 2025 and a relative strength rating upgrade from 69 to 75. This article assesses whether EGO's improving fundamentals and strong technical setup position it as a compelling long-term buy in a sector poised for sustained growth.

Fundamental Catalysts: Skouries and Earnings Momentum

Eldorado Gold's first-quarter 2025 results underscored its strategic pivot to capitalize on both gold and copper markets. Revenue rose 38% year-over-year to $355.2 million, driven by a 41% jump in the realized gold price to $2,933 per ounce. Net earnings of $72 million ($0.35 per share) outperformed the prior year's $35.2 million ($0.17 per share), despite higher production costs. The company's free cash flow, excluding Skouries capital expenditures, reached $75.5 million, reflecting robust operating cash flow generation.

The Skouries project in Greece, however, is the true game-changer. Now 66% complete, this high-grade copper-gold mine is on track for first production in Q1 2026. At an estimated $1.06 billion in capital costs, Skouries will diversify EGO's revenue beyond gold, tapping into copper's tailwinds from electric vehicles, renewable energy, and grid modernization. By 2026, the mine is projected to generate 135,000–155,000 ounces of gold and 45–60 million pounds of copper annually—a dual-commodity strategy that insulates EGO from single-commodity volatility.

Technical Strength and Valuation Metrics

EGO's technical indicators paint a bullish picture. The stock price of $20.43 as of July 18, 2025, sits above its 50-day and 200-day moving averages, signaling sustained upward momentum. The MACD (5.56) and ADX (15.08) confirm a strong uptrend, while the RSI (51.47) suggests the stock is not overbought. Bollinger Bands show the price is within the 20.06–20.96 range for the 25-day period, indicating consolidation before a potential breakout.

Valuation metrics further justify EGO's appeal. At a trailing P/E of 10.87 and a price-to-operating cash flow ratio of 5.58, EGO is significantly cheaper than peers like Barrick Gold (P/E ~15) and Newmont (P/E ~18). This discount reflects market skepticism about EGO's execution risks at Skouries but also creates a margin of safety for investors. Analysts project earnings growth of $0.12 per share in 2025 and $1.30 per share in 2026, which could drive the stock toward $30 and beyond.

Industry Positioning and Risks

Eldorado's portfolio of assets in Turkey, Canada, Greece, and Brazil provides geographic diversification, a critical advantage in an era of geopolitical risk. Its 2025 production guidance of 460,000–500,000 ounces of gold, weighted toward the second half, aligns with a sector-wide trend of delayed output as miners grapple with higher input costs. EGO's all-in sustaining costs of $1,559 per ounce are in line with industry benchmarks but could improve as Skouries adds scale.

However, risks remain. The Skouries project's capital overruns ($143 million increase to $1.06 billion) highlight exposure to labor and inflationary pressures in Greece. Legal investigations into EGO's operations, though not uncommon in the sector, could create short-term volatility. Investors must also weigh gold's sensitivity to interest rates and copper's cyclical nature, which could diverge from gold's safe-haven role during periods of market stress.

The Case for a Long-Term Buy

Eldorado Gold's strategic alignment with both gold's safe-haven appeal and copper's energy transition potential makes it a unique player in the sector. The Skouries project, once operational, will transform EGO from a mid-tier gold miner into a dual-commodity producer with resilient cash flows. At current valuations, the stock offers a compelling risk-reward profile for investors who believe in the long-term trajectory of both metals.

For those seeking exposure to gold's macroeconomic tailwinds without overpaying for premium names, EGO's undervalued metrics and strong technical setup present an attractive entry point. While short-term volatility is inevitable, the company's disciplined capital allocation, robust cash flow, and transformative growth at Skouries position it to outperform peers in the coming years.

Investment Advice: Investors with a 12–18 month horizon should consider EGO as a core holding in a diversified mining portfolio. A breakout above $25 could signal a larger move toward $30, but prudence dictates monitoring Skouries' progress and gold price trends. For aggressive investors, options strategies like call spreads may offer leveraged exposure while capping downside risk.

In a sector where patience is often rewarded, Eldorado Gold appears to be a stock where fundamentals and technicals are finally aligning.