Buy 5 Gold Miner Stocks on Fed Rate Cut Hopes and Government Shutdown

Gold prices are witnessing a solid northward journey this year, benefiting the stocks associated with yellow metal mining. Gold prices have climbed nearly 51% year to date. On Oct. 7, it touched a new all-time high of $3,976/ounce. 

In the United States, expectations of more interest rate cuts by the Fed in 2025 increased due to weak labor market conditions. The recent shutdown of the U.S. government resulted in a lack of key economic data. Investors and even the Fed have to depend on private data for information. Under these circumstances, market participants are shifting more toward gold as the yellow metal is known as the “safe-haven” investment.

There were several reasons for the surging gold prices. The central banks of many emerging economies are continuously buying the yellow metal. Central banks are bolstering their gold reserves following rising global debt levels, President Donald Trump’s trade and tariff-related uncertainties and lingering geopolitical risks, especially in the Middle East.

Moreover, central banks across the world are in the process of cutting interest rates to spur economic growth. A low market interest rate is beneficial for non-income-bearing bullions like gold.  The CME Fedwatch interest rate derivative tool currently shows a 96.4% probability of a 25-basis-point rate cut in December.

At this stage, it should be prudent to invest in gold mining stocks with a favorable Zacks Rank. Five such stocks are: Agnico Eagle Mines Ltd. AEM, DRDGOLD Ltd. DRD, Alamos Gold Inc. AGI, Gold Fields Ltd. GFI and U.S. Gold Corp. USAU. Each of our picks currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Positives

Gold is gaining ground on a supply-demand imbalance. The World Gold Council said that the gold mining industry is suffering from a scarcity of deposits of the yellow metal. As gold miners have already explored prospective areas, new mines are very hard to be identified. Gold mining is a very lengthy process by its nature. Moreover, slow-moving government clearances create more hurdles for miners.

On the other hand, the use of gold in energy, healthcare and technology is rising. Therefore, an eventual demand-supply imbalance is likely to drive gold prices. Market participants are optimistic about the gold mining industry’s prospects. 

The chart below shows the price performance of our five picks in the past month.

Agnico Eagle Mines Ltd.

Agnico Eagle Mines is focused on executing projects that are expected to provide additional growth in production and cash flows. AEM is advancing its key value drivers and pipeline projects. The Kittila expansion promises cost savings, while acquisitions like Hope Bay and the merger with Kirkland Lake Gold strengthen AEM’s market position. 

The merger with Kirkland Lake Gold established the new Agnico Eagle as the industry's highest-quality senior gold producer. Higher gold prices are also expected to drive AEM’s margins. Strategic diversification mitigates risks, supported by prudent debt management and sustained financial flexibility.

Agnico Eagle Mines has an expected revenue and earnings growth rate of 30.6% and 68.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.4% over the last 30 days.

DRDGOLD Ltd.

DRDGOLD is a medium-sized, unhedged gold producer with investments in South Africa and Australasia. Incontrovertibly bullish about its product, DRD has recently concluded extensive refocusing of its gold interests. DRD sells gold and silver bullion. DRD is involved in provision care and maintenance services and operation of training center.

DRDGOLD has an expected revenue and earnings growth rate of 35.2% and -0.7%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for current-year earnings has improved 57.8% over the last 60 days.

Alamos Gold Inc.

Alamos Gold is a Canada-based intermediate gold producer with diversified production from three operating mines in North America. This includes the Young-Davidson mine in northern Ontario, Canada and the Mulatos and El Chanate mines in Sonora State, Mexico.

Alamos Gold has an expected revenue and earnings growth rate of 33.4% and 76.3%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for current-year earnings has improved 2.9% over the last 30 days.

Gold Fields Ltd.

Gold Fields operates as a gold producer with reserves and resources in Chile, South Africa, Ghana, Canada, Australia, and Peru. GFI also explores for copper and silver deposits. GFI has an expected revenue and earnings growth rate of 69.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.3% over the last 30 days.

U.S. Gold Corp.

U.S. Gold is a publicly traded gold exploration and development company with a domestic focus. USAU has a portfolio of exploration properties. USAU has an expected earnings growth rate of 46.9% for the current year (ending April 2026). The Zacks Consensus Estimate for current-year earnings has improved 7.7% in the last 30 days.

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This article originally published on Zacks Investment Research (zacks.com).

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