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Gold’s Breakout to Fresh Record Highs
Global demand for gold has surged since the outbreak of the Russia-Ukraine conflict, with prices rising more than 130% from its September 2022 levels. Gold has shown remarkable resilience this year, rising 40% year-to-date and outperforming global equity markets.
Gold’s rally has been fuelled by a combination of supportive factors, including inflation concerns, expectations of the Fed resuming an easing cycle, a softer U.S. dollar, and central bank demand. Persistent geopolitical tensions, elevated global debt levels, weaker U.S. growth prospects, and tariff-driven inflation risks have further driven investors toward gold, while growing worries over U.S. fiscal discipline and the Federal Reserve’s institutional independence have intensified the search for stability, strengthening the metal’s appeal during times of uncertainty.
Gold Shines as Dollar Weakens and Rate Cut Bets Mount
Gold surged to an all-time high of $3,739 per ounce on Tuesday and is on track for its strongest annual performance since 1979. The latest rally follows dovish signals from the U.S. Federal Reserve, with the market widely expecting three interest rates cuts this year. 1
The latest rally comes amid the U.S. dollar slumping to a ten-week low, amplifying bullion’s allure. Non-yielding assets such as gold typically outperform in a low-rate environment, as they become more attractive relative to government bonds.
Gold Gains on U.S. Policy Uncertainty and Eroding Fed Independence
Uncertainty surrounding U.S. President Donald Trump’s trade tariffs has also been a driver of gold. Additionally, Trump’s direct conflict with the Federal Reserve have shaken confidence in U.S. policymaking, further undermining the dollar’s status as the world’s reserve currency. 2
Trump’s political pressure on the central bank could erode institutional credibility and may accelerate foreign diversification away from dollar-denominated assets, boosting the strategic case for gold.
Inflation, Stagflation Fears, and Fed Easing Expectations
Despite headline inflation stabilizing, underlying concerns about stagflation are fuelling demand for bullion. Gold is increasingly seen as a hedge against stagflation, a scenario where inflation persists while growth and labour markets deteriorate.
Recent weak payrolls data and the highest unemployment rate since 2021 3 have locked in expectations of the Fed delivering three interest rate cuts this year, pushing gold prices higher. Futures imply more than 100 basis points of easing under Powell’s watch before his term ends in May 2026.
Technical Analysis
After a strong rally in early 2025, gold entered a consolidation phase from April, forming an ascending triangle – a continuation pattern typically resolved to the upside. The resistance of $3,499 was broken in early September, confirming the bullish pattern and opening the way for a measured move toward the $3,800-$3,900 zone based on the triangle’s height projection.
While a short-term pull back is possible as the Relative Strength Index (RSI) is in strongly overbought territory, momentum remains firmly anchored within the 40-80% bull market band, reinforcing the bullish outlook over the long-term. Given the positive fundamental and technical backdrop, we see levels to $4,500 achievable in 2026.
Why Gold Miners ETFs Are Now Outperforming Gold and What’s Next in 2026
In 2024, gold miners ETFs lagged behind the performance of gold itself despite a favourable environment for the metal. The main reason was that mining companies faced elevated costs across the board, from energy and fuel to labour and equipment, which eroded the profitability benefits of higher gold prices. While gold was seen as a pure safe-haven asset, miners were treated as equities, leaving them vulnerable to pressure from high real interest rates and broad equity market underperformance relative to gold.
The story has changed in 2025. With oil prices dropping year-to-date and other input costs stabilizing, miners are enjoying improved margins as gold prices kept rising. Years of balance sheet repair and disciplined capital spending are paying off, with many companies now able to generate improved free cash flow and return capital to shareholders through dividends and buybacks. This combination of leverage to the gold price and the appeal of equity income has attracted flows into gold miners ETFs, leading them to outperform bullion. 4
Looking ahead to 2026, the outlook for gold miners will hinge on the macroeconomic backdrop. If the Federal Reserve follows through with its projected rate cuts and the U.S. dollar weakens further, gold should remain well supported, setting the stage for miners to extend their outperformance. Inflation is likely to stay elevated, not least because tariffs will be passed on to consumers, and a combination of sticky prices and looser monetary policy could push real interest rates into negative territory, a scenario historically favourable for gold. In such an environment, miners stand to benefit disproportionately, as revenues rise with gold while operating costs remain relatively stable, driving earnings growth.
Investors Pour Billions into Gold and Miners ETFs Amid Bullion’s Price Rally
Investor appetite for gold shows no sign of cooling as prices surge to record highs. In August alone, commodities-focused funds dominated by precious metals attracted more than $6 billion in new capital, lifting total inflows for 2025 to $31 billion. That marks the second-largest tally in the past 15 years and puts this year on track to potentially surpass the $44 billion record set in 2020. Precious-metals equity funds also benefited, pulling in $1.3 billion in August.
The VanEck Gold Miners ETF (GDX), boasting $20.0 billion in net assets, stands as the sector’s benchmark. So far in 2025, GDX has surged 103.7%, while the Leverage Shares +3x Long Miners ETP designed to provide 3 times its daily performance has soared 484.7%, far outpacing gold’s 40% gain and the S&P 500’s 12% advance.
The Leverage Shares +3x Long Gold Miners ETP provides professional investors with leveraged exposure to the gold mining sector earnings potential, and in this environment, the ETP offers an opportunity to capture amplified returns while maintaining a focused exposure to gold miners.
Footnotes:
Disclaimer:
This is a financial promotion for the purposes of s21 of the UK Financial Services and Markets Act 2000 (“FSMA”) which has been approved by Leela Capital Regulatory Solutions Limited (“LCRS”), authorised by the Financial Conduct Authority (FCA) (FRN 845185) for communication by Leverage Shares Management Company Limited as at (19 September 2025). LCRS is incorporated in England and Wales, company number 10161396, registered office 82 St John Street, London, EC1M 4JN Please refer to the ETP Prospectus and Key Investor Information Document (“KIID”) before making any investment decisions. This information originates from Leverage Shares Management Company Limited, which has been appointed by Leverage Shares Public Limited Company as provider of administrative and arrangerservices (the “Arranger”). Leverage Shares Public Limited Company registered address is 2nd Floor, Block 5, Irish Life Centre, Abbey Street Lower, Dublin 1, D01 P767, Ireland and is Registered in Ireland under registration number 597399. Leverage Shares Management Company Limited registered address is 116 Mount Prospect Avenue, Clontarf, Dublin 3, Ireland and is Registered in Ireland under registration number 596207. The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. Leverage Shares Public Limited Company and the Arranger (together referred as “Leverage Shares”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. Opinions are current as of the publication date and are subject to change with market conditions. Investing involves high risks, including potential loss of all your money. Investors should be aware that past performance is not a reliable indicator of future results. Forecasts are not a reliable indicator of future performance. Independent advice should be sought where necessary.
Investors should refer to the ETP Prospectus and Key Investor information Document (“KIID”) before making any investment decisions.
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