Gold prices have been on a meteoric rise, soaring nearly 24% over the past year and up over 900% since 2000, vastly outpacing the S&P 500’s 489% return over the same period. In line with this surge, Newmont Corporation (NYSE: NEM), the world’s largest gold mining company, has seen its stock jump more than 40% year-to-date. But with prices at historic highs, should investors still consider Newmont a buy, or has the opportunity passed?
What It Means to Invest in Gold Mining Stocks Like Newmont
When purchasing physical gold or a gold-backed exchange-traded fund (ETF), investors own a portion of the existing gold supply. On the other hand, buying gold mining stocks gives equity in the reserves—gold that is still in the ground. As the largest gold mining company globally, Newmont also produces copper, silver, zinc, and lead.
Newmont’s global operations include both projects it directly owns and manages, as well as those run through joint ventures and partnerships. The company’s financial performance is tied to two key factors:
The amount of gold and other metals it produces.
The market prices of these metals.
Gold’s Boom-and-Bust History and Its Implications for Investors
Gold has long been a popular hedge against inflation, with its limited supply and enduring value. It tends to shine during times of uncertainty, a trend amplified by recent economic concerns. For example, the Trump administration’s tariff policies earlier in 2025 sparked global market jitters, driving more investors toward gold.
However, the precious metal has also experienced cyclical boom-and-bust patterns, particularly between the late 1970s and today. Despite gold’s long-term upward trajectory, prices have not been consistently reliable over extended periods. This volatility helps explain why Newmont’s total return since 1989 is just 240%. Gold mining companies often see sharp price movements tied directly to the fluctuating market value of the metal itself.
Could Gold’s Rally Be Nearing Its Peak?
Gold’s dramatic rise over the past year, including new all-time highs, raises the question: Is this rally nearing its end? While no one can predict short-term price movements, there are signals suggesting gold may be close to its peak.
Investor sentiment is running high, as indicated by the volatility index (VIX), which recently spiked to its third-highest level ever. In addition, U.S. consumer sentiment has plummeted to near-record lows, while Google Trends data shows a significant uptick in searches for terms like “how to invest in gold” and “gold stocks.”
Gold, being a hard asset, lacks an underlying business model or earnings to support its value—its price is driven purely by market forces. As a result, periods of extreme fear, which often boost demand for gold, could coincide with the near-term peak of its market value.
Newmont’s Stock Appears Cheap, But Timing Is Key
Ironically, Newmont’s stock may appear attractive due to its price-to-earnings (P/E) ratio of 15 times earnings, which seems low given its recent earnings growth. In 2025, the company earned $3.48 per share, benefiting from elevated gold prices. However, this contrasts with the $1.57 per share it earned in 2023, suggesting a cyclical pattern driven by gold’s volatility.
Cyclical stocks like Newmont tend to see their peak earnings during periods of elevated prices. Once gold prices inevitably fade, earnings are likely to follow suit. While the stock may seem cheap based on current earnings, this could be the worst time to buy, as the valuation may be artificially high in the context of a market peak.
Is Newmont a Good Investment Right Now?
Before considering an investment in Newmont, investors should take note of some critical factors. The Motley Fool’s Stock Advisor team, which has a track record of identifying top-performing stocks, has not included Newmont on its current list of the 10 best stocks to buy. Historically, stocks on this list, such as Netflix in 2004 and Nvidia in 2005, have yielded substantial returns for early investors.
The Motley Fool’s Stock Advisor has produced an average return of 872%, far surpassing the S&P 500’s 160% return. Investors may want to consider other stocks on the latest top 10 list, which could offer more compelling opportunities moving forward.
Conclusion
Newmont Corporation has experienced a remarkable 40% surge in 2025, but with gold prices near record highs and the market sentiment heavily skewed toward fear, now may not be the best time to buy. While the company is well-positioned in the gold mining industry, its cyclical nature and reliance on volatile gold prices make timing critical for potential investors. As the market recovers and investor appetite for riskier assets grows, it might be wise to look elsewhere for investment opportunities.
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