London-listed precious metals stocks gain as gold heads for fourth weekly rise

London-listed precious metals miners, including Fresnillo and Endeavour, saw significant gains as gold surged to a new record above $3,650/ounce and silver surpassed $42/ounce. This rally, pushing gold up nearly 40% in 2025, is primarily fueled by increasing expectations of US Federal Reserve interest rate cuts, which are weakening the dollar and Treasury yields, alongside robust central bank buying and substantial ETF inflows. However, analysts caution that gold's elevated levels are increasingly sentiment-driven, potentially directing investor interest toward silver as a more affordable alternative.

Analysis

Gold prices have surged to a new record above $3,650 per ounce, culminating in a nearly 40% advance in 2025 and driving gains in London-listed miners such as Fresnillo PLC (+2.0%) and Endeavour Mining PLC (+1.7%). The rally is primarily fueled by market expectations of an imminent US Federal Reserve interest rate cut, a view reinforced by recent weak labor market data and on-target inflation figures. This macroeconomic shift is depressing the US dollar and Treasury yields, creating a highly supportive environment for non-yielding bullion. The upward price momentum is further amplified by strong physical demand, evidenced by significant central bank buying and substantial inflows into gold-backed ETFs, which expanded holdings by 25 tons this week alone. However, analysts caution that at these elevated levels, trading is becoming increasingly driven by short-term sentiment rather than fundamentals, introducing higher volatility risk. Concurrently, silver has risen to its highest price since 2011, surpassing $42 per ounce, and may attract flows as a more affordable alternative for investors.

Key Decisions for Investors

• Investors should closely monitor the upcoming US Federal Reserve announcement, as any policy decision that disappoints rate-cut expectations could sharply reverse the current gold price momentum.
• Given that gold is trading at record highs and is increasingly sentiment-driven, it is prudent to consider protecting profits in gold-related assets through partial sales or by setting tighter stop-loss orders.
• Evaluate silver as a relative value investment, as it offers a potentially more affordable entry point to gain exposure to the bullish trend in precious metals.
• Note the outperformance and upcoming FTSE 250 inclusion of Pan African Resources, which signals specific positive momentum that could attract further institutional interest.