It has been a stellar year for gold and other precious metals. Despite correcting in October, precious metal prices rallied again this week. Altogether, gold prices have risen by over 50 percent, and silver by over 60 percent so far this year. Over the same period, gold and silver mining stock returns have almost doubled.¹

We asked George Cheverly, Portfolio Manager for the United Gold and General Fund, whether this momentum is sustainable going into the new year, especially given October’s price dip.

1. Do you expect gold prices to continue their upward trajectory in 2026?

We saw a pull-back in the price of gold last month when the USD strengthened slightly and investors took profit from their gold ETFs. However, gold rallied this week on news of an end to the US government shutdown. In general, we see any gold price weakness to be temporary and in our view, the three key drivers of gold price increases remain largely intact:

• Central banks around the world continue to allocate to gold as they diversify holdings away from US treasuries, given concerns over the level of US debt and fiscal deficits. In fact, for the first time since 1996, a higher percentage of international reserves is currently held in gold rather than US Treasuries.
• Geopolitical and inflation risks continue to be high. Gold is seen as a hedge against such uncertainties because it is deemed as a stable store of value relative to paper currencies.
• The Fed is now cutting interest rates and other G7 central banks are likely to follow suit. Gold typically gains when the real rates of return decline because the income benefits of holding the US dollar is lessened.

2. Silver prices have also been soaring. Why is this?

The drivers for silver demand are somewhat different from gold. Silver’s good conductivity gives it real-world application within a wide range of new and cutting-edge products such as semiconductors, EV batteries, solar panels and medical devices.

In addition, silver like gold, is a prized possession when made into jewellery and bullion coins, but is considerably cheaper, especially given the recent gold rush. It is therefore more affordable to mass retail consumers. All this has resulted in more demand for silver than silver miners are able to supply, and silver prices have nearly tripled over the past five years.

3. Where do you see gold and silver prices headed in 2026?

Our view is that gold prices will likely remain around US$4,000 per oz or move higher through 2026. We think a fall back below US$3,500 per oz is far less probable and expect to see volatility remaining similar to current levels.

Whilst gold prices will most likely rise in 2026, they are unlikely to do so at the rate seen so far this year. Even so, we believe prices will average around $4,000/oz or more next year. This means the 2026 average will likely be about 15 to 20 percent higher than the 2025 average.

Our expectation for silver prices is similar to that of gold, with many of the same forces influencing silver prices going into 2026. Should silver prices remain at current levels then we expect silver linked equities to also perform well.

4. What is your 2026 outlook for gold and silver mining stocks?

We think current valuations for gold and silver mining stocks do not fully include recent margin improvement.

Assuming average gold prices at US $4,000 per oz next year, our models suggest that gold miners’ average free cashflow will be 10 percent or more across our portfolio holdings. Silver prices are more volatile than gold, but we anticipate a similar story for silver related equities. This suggests upside potential to current equity prices. As such, we continue to look for companies which can grow production over the next two years at similar or lower costs, thus protecting their current margins. We also believe further consolidation is needed in the precious metals industry and that we will continue to see M&A as an important driver of value.

5. What are the implications of China’s new gold policy on gold prices and gold miners?

China is currently seeking public feedback on draft regulations to streamline the licensing of gold imports and exports. By extending the validity of such licenses from six to nine months and removing limits on the number of uses per permit, China hopes to simplify the cross-border trade of gold products. If and when finalised, the new policy will likely increase demand from Chinese consumers for the precious metal.

It is also notable that Chinese central bank buying has been one of the key drivers of gold demand over recent years as China actively seeks to diversify its reserves. It is believed that these purchases are not reported in their entirety and look set to persist, with the rate of buying likely to be inversely correlated to gold prices. This will continue to benefit gold prices and related gold mining stocks.

United Gold & General Fund (the “Fund”)

What are its key features?

1. Exposure to the world’s largest miners

The Fund aims to deliver capital gains by investing primarily in gold mining companies from across the world. While gold miners make up the core (around three quarters of the portfolio), the Fund also invests in diversified mining companies as well as producers of silver, platinum, and industrial metals like copper and steel.

Fund holdings include some of the largest gold mining companies in the world, such as Newmont Corp and Agnico Eagle. However, by investing beyond just gold miners, the Fund offers investors not just access to opportunities within the wider metals and mining sector, but also better portfolio diversification.

Fig 1: Fund top 10 holdings, as of 31 October 2025

Source: UOBAM, Morningstar, as of 31 October 2025

2. Portfolio diversification

Gold and gold mining stocks have delivered strong gains this year, but it is the Fund’s exposure to other metals that is giving it an edge.

For example, silver prices outpaced gold in September while copper prices saw strong gains on supply concerns following disruptions at Indonesia’s Grasberg mine. As a result, the Fund outperformed the NYSE Arca Gold Miners Index by around 6 percent during the month.

Diversification also proved its worth during the mid-October gold correction, when gold mining stocks pulled back. The Fund’s allocation to other metals and commodities resulted in a smaller decline of 10.06 percent compared to the index’s drop of 14.71 percent.

Fig 2: Fund returns vs gold miners index

Source: Bloomberg, Morningstar, for the periods of 1 – 30 Sep 2025, 16 Oct – 5 Nov 2025. | Refers to United Gold & General Fund – Class A SGD Acc | Fund performance is calculated on a NAV to NAV basis. Past performance is not necessarily indicative of future performance. | Does not include the effect of the current subscription fee that is charged, which an investor might or might not pay.

3. Higher reward, higher risk

The Fund has delivered exceptional performance. Its gains year-to-date stands at an impressive 92 percent, and over the last three years, the Fund has delivered 36 percent annual returns. This is even higher than the rise in metal prices, because miners offer operating leverage. This means that when commodity prices rise above a certain threshold, miners' revenues increase faster than costs, leading to higher growth in margins and earnings.

However, such high returns come with higher volatility. This is because, despite the diversification across metals, exposure to commodity cycles and miners’ profitability drivers can cause fund returns to fluctuate significantly in the short term, as we saw in mid-October during the gold price correction. This makes the Fund a more volatile option compared to traditional equity or balanced funds, and underscores its high-risk classification.

Fig 3: Fund returns and volatility

Source: Morningstar, as of 31 October 2025. | Refers to United Gold & General Fund – Class A SGD Acc | Benchmark: 70 percent FTSE Gold Mines Index and 30 percent MSCI ACWI Metals & Mining Index | Fund performance is calculated on a NAV to NAV basis. Past performance is not necessarily indicative of future performance. | Does not include the effect of the current subscription fee that is charged, which an investor might or might not pay.

Fund details

¹Source: NYSE Arca Gold Miners Index, MSCI ACWI Select Silver Miners Investable Market Index, as of 31 Oct 2025