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Gold and silver costs have been hovering greater in latest months. Gold hit file highs over $5,500 per ounce and silver soared previous $100 per ounce for the primary time.
Enter FTSE 100 miner, Fresnillo (LSE:FRES). This mining big digs up gold and silver, primarily in Mexico. Over the previous yr, its share value rocketed greater by 430%. That’s insanely good for a FTSE 100 share as the common for the index was round 22%.
Over the previous 5 years, it has even overwhelmed Rolls-Royce shares, which could appear arduous to consider on condition that firm’s post-pandemic power.
FTSE 100 prime performer
However can Fresnillo proceed its meteoric rise in 2026?
Effectively, that is dependent upon whether or not demand for gold and silver continues to climb. Rising gold costs have been pushed by central banks snapping up the shiny metallic, a weaker US greenback, and geopolitical tensions.
As for silver, it tends to maneuver much more dramatically than gold. Some even name it ‘gold on steroids’. Like gold, silver can also be seen as a protected haven in instances of uncertainty. However in distinction, it has sturdy industrial makes use of too. For example, it’s utilized in photo voltaic panels, electrical automobiles, and AI information centres. All of that are anticipated to be high-growth sectors for the approaching years.
Previously, when valuable metals have seen explosive rallies, they might grow to be fairly unstable. Costs can swing wildly in each instructions. They might additionally expertise profit-taking within the brief time period.
That stated, many consultants count on medium- to long-term traits to push costs upward. Many main banking establishments goal over $6,000 for gold and over $150 for silver this yr.
As for Fresnillo, its direct tie to commodity supercycles just like the one we might be experiencing now make it a standout for continued outperformance in 2026. It delivered sturdy 2025 outcomes, however latest downward revisions to 2026 output have launched some warning.
Leveraged play on gold and silver
As a low-cost operator, it stays aggressive and affords revenue margin resilience and powerful cash-flow era. A return on capital employed of over 17% suggests good use of capital. And a ahead price-to-earnings ratio of 30 is consistent with historic averages throughout bull cycles. As a bonus, Fresnillo additionally affords a 2% dividend yield.
However keep in mind, if costs for valuable metals reverse for an prolonged interval, Fresnillo shares might endure within the close to time period.
That’s why I might solely personal it as a part of a balanced and diversified portfolio. FTSE 100 shares are usually giant, mature, and established firms that don’t typically witness triple-digit returns.
However once in a while, there are outliers. Previously yr, there have been six FTSE 100 shares that resulted in returns of over 100%.
Whether or not we’ll see a repeat in 2026 is unknowable, however definitely attainable. That stated, after any near-term volatility in valuable metals costs, I feel long-term traits will proceed to assist them. That ought to bode nicely for Fresnillo in 2026.
