One of the best-performing FTSE 100 progress inventory of 2025 rocketed round 400%. That’s a unprecedented return, up there with the very best of US tech. But this barnstorming performer isn’t a know-how firm, and even an American one, however an usually ignored British blue-chip.
It’s Fresnillo (LSE: FRES), the Mexico-focused gold and silver miner. Final 12 months it soared together with treasured metals costs. I’ve a gaping absence in my portfolio: no gold. Fresnillo made me realise what I used to be lacking, however I additionally feared it was too late to pile in after such a spectacular run.
Now I’m questioning whether or not I lastly have that chance.
Gold has misplaced its shine
The gold value rose round 64% in calendar 2025, its strongest efficiency since 1979. Traders piled into the valuable metallic as geopolitical tensions and commerce wars intensified, the greenback weakened and rates of interest fell.
In January, gold hit an all-time excessive of round $5,595 an oz. I wasn’t shopping for at that value, and I’m glad I didn’t. At present, the value is $3,875, a fall of roughly 30%.
The reversal has been pushed by a stronger greenback and hovering bond yields, which make interest-paying property extra enticing than gold that has no yield. Traders have additionally been taking earnings after the extraordinary rally.
Fresnillo has suffered too. Its shares are down 33% this 12 months, following a brutal 16.6% fall in October. That was the second-biggest dip on the FTSE 100.
A tempting value, however dangers stay
I like shopping for shares after they’re down. It permits me to choose up extra inventory at a cheaper price, then watch for restoration. It requires endurance and isn’t a precise science. I’ve purchased too early earlier than, notably with Diageo and JD Sports activities.
That would occur right here. Gold’s issues could persist, as inflation, excessive rates of interest and a powerful US greenback proceed to squeeze the value. Fresnillo might fall additional.
A miner isn’t purely a wager on bullion. Accidents, manufacturing slips, rising vitality and labour prices, decrease ore grades and political or regulatory issues can all hit earnings.
Fresnillo seems to be fairly valued, with a price-to-earnings ratio of 15.8. Its trailing dividend yield is 4.26%, giving me some revenue whereas I wait. I wouldn’t get that if I purchased precise gold, though dividends are by no means assured.
I’m watching carefully
Current gold weak spot is somewhat puzzling provided that US know-how shares are falling too. Usually, buyers flip to gold when markets panic. I’m questioning if gold is now not the secure haven of yore, however a momentum commerce in its personal proper that could be bought alongside shares, particularly if savers want money.
At present’s political, financial and geopolitical dangers are large. I need some long-term gold publicity in my portfolio, and this sell-off is giving me the possibility to get it. I’m watching Fresnillo like a hawk and plan to purchase its shares within the days or even weeks forward. This FTSE 100 progress inventory can also be sliding, and is nicely value a glance…
What progress inventory can we like higher than Fresnillo Plc proper now?
One in all our Share Advisor analysts has simply launched a model new inventory report that we predict is a must-read for any investor trying to try to generate potential progress.
And the very best bit is that you may see it for your self, proper now, completely freed from cost!
No jargon. No laborious promote. Only a clear take a look at a progress share concept we predict is value your time.
Harvey Jones owns shares in Diageo and JD Sports activities.
