The average return for FTSE 100 stocks in 2025 so far is 17%. With less than a month left of 2025 as I write, it’s looking like one of the best years for the index this century. Given the Footsie’s focus on huge blue-chips in mature industries, it should come as no surprise that the bulk of those gains have been strong-but-steady returns rather than the kind of growth that makes your eyes pop.
But there is one, very notable exception.
The share price of FTSE 100 mining firm Fresnillo (LSE: FRES) began the year at 649p and has surged all the way to 2,722p on 6 December. The company’s operations in mining gold and silver in the Americas has looked highly attractive to investors who have been rushing in. The stock is outperforming every American artificial intelligence company on the S&P 500 over the year too!
So what happened here?
What happened?
The short answer is that the price of gold is skyrocketing. The price of commodities has a big effect on mining firms the same way the price of oil has a big effect on BP or Shell. As gold makes up the majority of Fresnillo’s volume of metals sold, the share price has been carried upwards.
An increase in the firm’s gold production over 2025 has helped too. It’s also worth mentioning that the price silver is rising. That’s another metal Fresnillo pulls out of the earth.
Why is the price of gold surging? One factor is the massive and growing debt of many of the world’s biggest countries. A risk of high debt levels is inflation. This makes a ‘safe haven’ asset like gold more attractive to investors than currency.
Another factor is ‘dedollarisation’. Governments like China and Russia have been buying lots of gold to move away from the US dollar. This increased demand pushes the price up too.
A buy?
Is Fresnillo a good stock to buy today? I’d say it’s worth considering. For one, it doesn’t look all that expensive on a forward valuation. A forward price-to-earnings ratio of 18 is really quite reasonable. For context, the FTSE 100 average is around 19 at the moment.
Much depends on the price of gold, of course. I can’t see the factors that caused gold to surge this year going away. And if things fall apart, then a similar year might be on the cards. There’s a reason gold has been the numero uno safe haven asset for thousands of years. Fresnillo stock could be a viable option for those looking for safety in their portfolios.
But while this type of stock has its advantages as part of a balanced portfolio, I think are many greater opportunities for those seeking to build wealth.
