Gold capped an exceptional 2025 with one of its strongest annual performances in decades. According to the World Gold Council, throughout the calendar year, gold achieved more than 50 all-time highs and returned over 60%. Persistent geopolitical uncertainty, aggressive central-bank purchases and growing expectations of interest-rate cuts fueled steady inflows into the safe-haven asset, making gold a clear outperformer across global markets.
That momentum carried into 2026, culminating in gold hitting a record high on Jan. 12. The rally was underpinned primarily by rising geopolitical risks that kept investors on edge. Renewed tensions in the Middle East, alongside concerns around Iran and broader global flashpoints, increased demand for assets perceived as stores of value during periods of instability. In such environments, gold traditionally benefits as investors seek protection from sudden market shocks.
Gold also surged in the session as the Justice Department’s threat against the Fed revived fears over the central bank’s independence, undermining confidence in U.S. institutions. The episode raised policy uncertainty, weakened the dollar outlook and drove investors toward gold as a safe-haven asset. Bullion climbed close to $4,600 an ounce and silver neared a record after Fed Chair Jerome Powell said the indictment threat reflected broader pressure on the central bank. In such an environment, stocks like Harmony Gold Mining Company Limited HMY, Agnico Eagle Mines Limited AEM, Royal Gold, Inc. RGLD and Kinross Gold Corporation KGC emerge as viable safe-haven options.
Economic signals from the United States have been playing a crucial role. Softer-than-expected labor market data and signs of slowing growth strengthened expectations that the Fed could begin cutting interest rates later in 2026. Lower interest rates slash the opportunity cost of holding non-yielding assets like gold, making bullion more attractive relative to bonds and other interest-bearing instruments. These expectations were quickly reflected in higher gold prices.
Central-bank demand continued to provide a strong structural support. After heavy purchases throughout 2025, several central banks maintained their gold buying into early 2026 as part of efforts to diversify reserves away from the U.S. dollar and hedge against currency and geopolitical risks. This sustained official-sector demand tightened supply and reinforced bullish sentiment in the market.
Unlike stocks or bonds, gold does not generate income, and it pays no interest or dividends. Therefore, when interest rates are high, investors can earn better returns by holding fixed-income assets, making gold less appealing. Conversely, when rates fall, the opportunity cost of holding gold declines. With bond yields and savings returns offering less reward, investors are more willing to allocate money into non-yielding assets like gold, driving up demand and prices.
Our Choices
The stocks below flaunt a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Harmony Gold is a South Africa-based gold mining and exploration company that engages in the exploration, extraction and processing of gold and other minerals. HMY’s expected earnings growth rate for the current year is 111%. The Zacks Consensus Estimate for its current-year earnings has improved 0.8% over the past 60 days. HMY has a Zacks Rank #2.
Agnico Eagle Mines is a global gold mining company engaged in the exploration, development and production of gold. AEM’s expected earnings growth rate for the current year is 86.1%. The Zacks Consensus Estimate for its current-year earnings has improved 2.1% over the past 60 days. AEM has a Zacks Rank #1.
Royal Gold is a Denver-based precious metals royalty and streaming company. RGLD’s expected earnings growth rate for the current year is 52.9%. The Zacks Consensus Estimate for its current-year earnings has improved 1% over the past 60 days. RGLD has a Zacks Rank #1.
Kinross Gold is a gold mining company focused on the exploration, development and production of gold from mines across the Americas and West Africa. KGC’s expected earnings growth rate for the current year is 147.1%. The Zacks Consensus Estimate for its current-year earnings has improved 7.7% over the past 60 days. KGC has a Zacks Rank #1.
Bottom Line
Gold remains an attractive investment today because ongoing inflation and economic uncertainty elevate its safe-haven appeal. Central banks and investors are diversifying away from risky assets. Also, recent political turmoil, including the U.S. DOJ threat to the Fed chair amid pressure over monetary policy, has boosted gold’s demand as a hedge against market and policy risks.
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Download Atomic Opportunity: Nuclear Energy's Comeback free today.Kinross Gold Corporation (KGC) : Free Stock Analysis Report
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
Harmony Gold Mining Company Limited (HMY) : Free Stock Analysis Report
Royal Gold, Inc. (RGLD) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
