"Up 140% Yet Still Optimistic"... Resilient 100-Year-Old U.S. Gold Mining Leader [Business & Issue]

Newmont: The Leading U.S. Gold Mining Stock
Stock Price Remains Unshaken Despite AI Bubble Concerns
Economic and Geopolitical Uncertainty... "Gold Rally to Continue"

Newmont Corporation website

Newmont, the leading gold mining stock in the United States, continues its strong rally despite a somewhat sluggish U.S. stock market. With gold prices soaring this year, Newmont’s share price has risen by nearly 140% since the beginning of the year, yet there remains widespread optimism that further gains are possible. Experts point out that demand for gold persists amid concerns over economic downturn and growing geopolitical instability, and that Newmont’s financials and performance are stable, supporting the view that its share price will continue to rise.

Despite AI Bubble Concerns and Yen Carry Trade Unwinding Fears... Stock Price Continues to Soar

On December 4 (local time) at the New York Stock Exchange (NYSE), Newmont’s share price closed at $90.72, up 136.43% from the start of the year. Last month, while the S&P 500 index halted its six-month rally and dipped 0.04%, Newmont’s share price still climbed 15% during the same period. Even as the U.S. stock market wavered due to concerns over an AI bubble and the possibility of a rate hike in Japan, Newmont, the world’s largest gold mining company, continued its steady ascent on the back of rising gold prices.

Gold prices have continued their rally even after surpassing $4,000 per ounce for the first time ever in October. On December 4 at the New York Mercantile Exchange (COMEX), gold was priced at $4,243 per ounce, up 5.95% from October 7, when it first broke the $4,000 mark. As the stock market has slowed, the preference for safe-haven assets has grown, further increasing demand for gold.

CNBC analyzed that every $100 increase in the price of gold per ounce boosts Newmont’s average selling price, increasing its free cash flow by $550 million (about 810 billion won). Josh Wolfson, Head of Global Mining Research at Royal Bank of Canada (RBC), stated, “With this year’s surge in gold prices, Newmont’s free cash flow in the second half is expected to reach $3.5 to $4 billion, and expectations for continued shareholder returns such as share buybacks are driving up the share price.”

Over 100 Years of History... Stable Revenue and Financials for the Leading U.S. Gold Mining Stock

Reuters Yonhap News

According to The New York Times, Newmont, founded in 1916, is a representative American gold mining company and a flagship stock of the S&P 500 index. Its founder, William Boyce Thompson, was originally known as the “Copper King” for monopolizing copper mines in the western United States in the mid-19th century. He later focused on the gold mining industry, consolidating his mining businesses under Newmont.

Currently, Newmont owns 20 mines worldwide, including in North America, Central and South America, Africa, and Australia, and mines not only gold but also silver, copper, and zinc. By acquiring Canadian mining giant Goldcorp in 2019 and Australia’s largest gold mining company Newcrest in 2023, Newmont has established itself as the world’s largest mining company.

In October, despite a slight decrease in gold production, Newmont reported better-than-expected third-quarter results. Its gold production for the third quarter of this year was 1.421 million ounces, down about 4% year-on-year, but third-quarter revenue rose 20% to $5.524 billion, and net profit reached $1.9 billion. The company’s financial structure has also greatly improved, with assets of $5.5 billion and liabilities of only $12 million, resulting in an extremely stable financial position with virtually no debt burden.

With stabilized revenue and financial structure, Newmont is currently strengthening shareholder returns. In the second quarter of this year, the company repurchased $1 billion worth of its own shares and announced an additional $3 billion share buyback plan.

Gold Rally Expected to Continue Amid Economic and Geopolitical Concerns... "Further Stock Price Gains Possible"

Reuters Yonhap News

Experts predict that concerns over economic instability and geopolitical tensions will continue to drive demand for gold as a safe-haven asset next year, leading to further gains in Newmont’s share price.

According to a survey conducted by Goldman Sachs at the end of last month among more than 900 institutional investors, 36% of respondents expect gold prices to exceed $5,000 per ounce next year. Another 33% expect prices to rise to the $4,500-$5,000 range. In contrast, only 5% believe gold prices will fall to the $3,500-$4,000 range next year.

The main factor driving up gold prices is the buying spree by central banks. According to the World Gold Council (WGC), central banks worldwide purchased 1,089 tons of gold last year and have been buying more than 1,000 tons each year since 2022. This is more than double the average annual purchases in 2021. As the risks of inflation from the U.S.-led tariff war have grown alongside the wars in Ukraine and the Middle East, central banks in various countries have significantly increased their gold holdings as a safe-haven asset.

Michael Schuh, an analyst at Deutsche Bank, told CNBC, “With sustained central bank buying and steady private sector demand, gold prices will trade above $5,000 even in 2027. Central banks, facing slowing growth and inflationary pressures, will continue to buy gold regardless of price fluctuations, supporting not only gold prices but also the strength of gold-related stocks.”