Investors Should Embrace the Mining Sector as Gold Prices Hold Above $3,300

With gold prices maintaining their position above $3,300 an ounce, investors are encouraged to take a closer look at the mining sector. The continual demand for gold is underpinned by various economic factors, and while some analysts suggest that gold prices may be overextended, there are still substantial opportunities for growth, especially within gold mining stocks.

In a recent interview with Kitco News, Chris Mancini, associate portfolio manager of the Gabelli Gold Fund (GOLDX), highlighted that the current price threshold is a critical juncture for the industry. “Sitting here in my seat and looking at my models and seeing the free cash that the gold stocks are going to generate, especially if you think the price of gold is going to stay above $3,000, gold stocks really are the place to be,” Mancini remarked.

Why Gold Stocks Are Attractive Now

Mancini pointed out that mining companies are currently operating at attractive free cash flow yields that are set to increase as gold prices remain elevated. “We believe that owning the miners right now is the best approach because they’re extremely undervalued,” he explained in an updated note released on Monday. Major mining operations have recently reported record earnings for the first quarter, indicating robust financial health within the sector.

One specific example Mancini cited is Agnico Eagle, Canada’s largest gold producer, projected to generate about an 8% free cash flow yield at current gold pricing. He noted, “They’re generating with some growth, so free cash flow yields should grow over the next couple of years. These companies, compared to banks and tech companies, are generating substantial free cash flow.”

Market Trends Highlighting Mining Opportunities

Despite the noticeable gains in gold prices, which have surged nearly 26% in 2025, the VanEck Gold Miners ETF (NYSE: GDX) has far outpaced its sector peers, boasting a remarkable 41% increase this year. However, GDX remains over 24% below its 2011 all-time highs, indicating significant potential for recovery and upside growth in the sector.

Mancini emphasized that many investors and fund managers have largely overlooked mining stocks while concentrating on gold prices directly. As broader economic conditions and equity markets shift, he anticipates an increased focus on the mining sector. “I expect they will start to pay more attention to the mining sector,” Mancini stated.

Price Resilience and Market Confidence

While gold prices have experienced fluctuations from last month’s peak of $3,500 an ounce, Mancini believes that the market is building a solid base above $3,000. “It is difficult to see prices falling below $3,000 an ounce, as the world will continue to have some uncertainty, and that will continue to drive flows into gold,” he explained.

In addition to market uncertainties, Mancini sees encouraging trends in foreign exchange markets, particularly the potential weakness of the U.S. dollar and declining interest rates. With anticipated rate cuts by the Federal Reserve likely through the end of the year, the conditions surrounding gold still look favorable. “The trade going forward is really about China and the rest of the world diversifying out of dollars and into gold, and China’s central bank is now buying gold,” he asserted.

Conclusion: A Golden Opportunity Awaits

For investors looking for value in the current financial landscape, focusing on the mining sector, particularly in gold, presents a compelling opportunity. With significant free cash flow generation and undervalued stocks amidst a backdrop of economic uncertainty, the case for gold investments is stronger than ever. As the industry evolves, informed investors will be well-positioned to capitalize on these emerging trends, enhancing their portfolios with a stake in the mining sector.