Gold's Bull Market: Assessing the Long-Term Cycle for Newmont and Agnico Eagle

The bull market for gold is no longer a whisper; it is a roar. The metal's price surged by about 65% this year, shattering records and hitting an all-time high near $4,560 per troy ounce. This explosive move was not a fleeting event but the culmination of a powerful macro cycle, and that cycle is expected to persist into 2026, setting the stage for a structurally supported bull market phase.

The primary driver was a perfect storm of forces. Geopolitical turmoil, from the Middle East to Ukraine, alongside tariffs and trade concerns, fueled safe-haven demand. At the same time, the U.S. dollar fell about 10% this year, and the Federal Reserve's rate cuts made the non-yielding metal more attractive. This combination sparked a historic demand surge, with investor and central bank demand totalled around 980 tonnes in the third quarter of 2025, more than 50% above the prior four-quarter average.

This demand is not expected to vanish. A key non-cyclical floor is being established by central banks. Projected demand is set to average around 585 tonnes a quarter in 2026. That steady, strategic buying provides a fundamental anchor for prices, as noted by analysts who see strong pockets of physical demand that are non-cyclical (central banks) and idiosyncratic (China demand) add to gold price support.

Looking ahead, the market's trajectory hinges on a clear set of risks and catalysts. The primary risk to the bull case is a sustained global economic recovery that pushes real interest rates higher, making yield-bearing assets more competitive. Conversely, the main catalyst for further gains is a geopolitical slowdown or escalation. As one analysis notes, the only way gold will fall next year is if global economic growth exceeds expectations, while a material slowdown could push prices up another 15-30%.

This sets the stage for a new phase. While the explosive, linear rally of 2025 is likely to moderate, the underlying trends are not exhausted. With central bank demand providing a steady floor and geopolitical uncertainty remaining a potent safe-haven driver, the market is positioned for a sustained bull market. Analysts project prices could average $5,055/oz by the final quarter of 2026, with the potential to climb toward $6,000/oz longer term. The macro engine is still running.

Mining Sector Performance: A 2025 Outperformer

The gold bull market's roar translated directly into extraordinary stock market returns. The sector emerged as one of the best-performing asset classes globally in 2025, with its top producers delivering staggering gains that far outpaced broader markets.

The scale of the move is clear. Barrick Mining's stock surged 186.91% in 2025, a performance backed by a powerful earnings beat where fourth-quarter profit grew more than 120% and EPS soared 126%. Newmont Corporation followed closely, with its shares gaining 168% last year. The standout, however, was Agnico Eagle Mines, where the share price more than doubled over the same period.

This wasn't just a few winners; it was a sector-wide rally. The exceptional returns across the major gold miners underscore the powerful macro tailwinds that drove the metal's price higher. Yet, this explosive performance raises immediate questions about sustainability and valuation. After such a dramatic run, the sector's multiples have compressed significantly, and the bar for future growth has been set very high. The market is now pricing in not just continued high gold prices, but also sustained operational excellence and a smooth path through the next phase of the bull market.

Valuation and Selectivity: Navigating the Cycle's Next Phase

The explosive rally of 2025 has reshaped the mining landscape, but it has also intensified the need for selectivity. As the bull market matures, the focus shifts from broad exposure to a deep dive into individual company fundamentals and strategic positioning. This is the phase where operational discipline and growth pipelines separate the leaders from the laggards.

The sector is entering a period of increased M&A activity, driven by the need to consolidate assets and secure growth. With many miners sitting on strong balance sheets and robust cash flows, the environment is ripe for strategic moves. This dynamic will likely accelerate the consolidation of lower-quality assets and reward companies with superior project portfolios and execution capabilities. The investment case is no longer just about gold prices; it's about which miners can best capitalize on them.

Newmont and Agnico Eagle are demonstrating this focus through their capital allocation. Newmont is advancing key growth projects like Ahafo North and Cadia Panel Caves, which are designed to extend mine lives and boost production. Agnico Eagle, similarly, is making significant expansion investments to grow its portfolio. These are not speculative bets but calculated moves to secure future cash flows in a structurally tight supply environment. Their ability to deliver on these projects will be a critical determinant of their long-term value.

The ultimate metric for assessing value in this cycle is the margin between the gold price cycle and the operating cash flow yield of each miner's portfolio. When gold prices are elevated and rising, the operating cash flow yield-the return generated from the company's core mining operations-becomes the true engine of shareholder value. This yield is what funds dividends, share buybacks, debt reduction, and further reinvestment. As one analysis notes, the sector remains undervalued and under owned, trading on low multiples despite strong performance. This suggests that even after the 2025 gains, there is still a gap between current valuations and the cash-generating potential of these companies, especially those with disciplined capital management and a clear path to growth.

The bottom line is that the easy money from a simple gold price bet is fading. The next phase demands a more nuanced view. Investors must look beyond the headline price of gold and scrutinize the operational strength, growth pipelines, and financial discipline of individual miners. It is a market where selectivity is not just beneficial-it is essential.

Catalysts and Risks: What to Watch in 2026

The bull market's next phase will be confirmed or challenged by a set of clear, forward-looking signals. For investors, the focus shifts from the macro backdrop to specific data points and operational milestones that will validate the cycle's trajectory.

First, monitor the quarterly central bank gold purchase reports, particularly from China and India. These are the most reliable barometers of the structural, non-cyclical demand that underpins the bull case. The market expects central bank demand to average 585 tonnes a quarter in 2026. Sustained buying at or above this pace would be a powerful vote of confidence in gold's reserve status and a direct support for prices. Conversely, a significant deviation downward would signal a potential shift in global monetary policy or a reassessment of geopolitical risk, acting as a headwind.

Second, watch the real interest rate environment. The primary risk to the bull market is a sustained global economic recovery that pushes real yields higher. This means closely tracking U.S. Treasury yields and the broader macroeconomic data that influences the Federal Reserve's policy path. A hawkish pivot or unexpectedly strong growth data could reignite the competitive pressure on gold from yield-bearing assets, challenging the thesis that the metal's rally is structural. The market's only clear path to a major price drop is if global growth exceeds expectations, making this the single most important macro risk to watch.

Finally, track the execution of major mine expansions and cost guidance from the sector's leaders, Newmont and Agnico Eagle. Their ability to deliver on projects like Ahafo North and Cadia Panel Caves is a test of operational discipline in a high-cost environment. Consistent cost control and the successful ramp-up of production are critical for converting high gold prices into robust operating cash flow. This is where selectivity matters most. Strong execution will reinforce the cash-generating potential that supports valuations, while delays or cost overruns would pressure margins and shareholder returns, regardless of the gold price.

The bottom line is that the cycle's momentum will be validated by a combination of steady physical demand, a supportive macro backdrop, and disciplined operations. These are the catalysts to watch in 2026.