UBS turns selective on gold miners as cost pressures cloud 2027 outlook

Wed Oct 08 2026

Gold has had a volatile 2026, reaching a record of around $5,400 per ounce in January, falling sharply to $4,000 in July, rebounding to $4,700 in August, and ending September at approximately $4,170.

UBS has used the volatility to review the gold-mining sector. While the bank remains broadly positive on gold equities at current prices, it says investors should be selective heading into third-quarter results and the 2027 guidance season. The bank maintains a constructive overall stance but identifies two risks investors should avoid.

The first is companies that may report negative cost guidance or production downgrades, with Kinross Gold highlighted following a guidance cut.

The second is potential acquirers. UBS warns that deal-driven stocks have historically underperformed and expects further mergers and acquisitions across the sector.

The GDX, the main gold-miner ETF, has moved by as much as 40% in either direction year-to-date, showing how gold miners can amplify both gains and losses in the underlying gold price.

UBS analysts believe valuations are reasonable at current gold prices. Miners are trading at around 6 times EBITDA at spot, broadly in line with the two-year average.

Senior producers

Among senior producers, Newmont and Barrick are both rated Buy, with price targets of $155 and $50 per share, respectively. Newmont is UBS's preferred choice because of its clearer cash-return outlook and low merger-and-acquisition risk.

Barrick is considered cheaper on valuation, although its investment case is more complex following the Nevada Gold Mines settlement with Newmont, under which Barrick paid $1.95 billion to bring three assets into the joint venture.

Mid-tier miners

Among mid-tier miners, Endeavour Mining and SSR Mining both carry Buy ratings.

UBS highlights:

- Endeavour Mining's improving cash conversion.

- SSR Mining's strong balance sheet.

- SSR Mining's more than $2 billion of deployable cash.

Streaming and royalty companies

In the streaming and royalty segment, Franco-Nevada is UBS's top pick, ahead of Royal Gold and Wheaton Precious Metals.

Gold price outlook

UBS has reduced its near-term silver-price forecasts while raising its gold estimates for 2028-29, reflecting a stronger medium-term price outlook. The bank now forecasts gold at $4,500 per ounce in both 2028 and 2029, compared with a long-term nominal price of $4,000.

Source: https://www.themarketreporter.co.uk