The Case for Precious Metals and Mining Stocks
The Motley Fool has historically been cautious about investing in gold and other precious metals, favoring the superior long-term performance of stocks.
However, incorporating different asset classes can enhance returns and reduce volatility, making diversification worthwhile.
Mining stocks provide a way to gain exposure to precious metals while also offering growth opportunities that the metals alone do not provide.
Long-term stock market performance has consistently been superior among various asset classes. While bonds, commodities, foreign currencies, and real estate have had their moments, cryptocurrencies have recently outperformed traditional investments within a limited 17-year period. The Motley Fool focuses primarily on stocks due to their proven track record over the past century.
In my Voyager Portfolio, I’m intentionally exploring stocks not covered by the Fool, which led me to include a precious metals mining company, Agnico Eagle Mines (NYSE: AEM). The firm excelled in 2025, capitalizing on the surge in gold and silver prices. This prompts a crucial question: is last year’s dramatic rise a fleeting occurrence, or are underlying market changes altering how we value gold and silver? This article starts a three-part series exploring the bullish sentiment around gold and silver and Agnico Eagle’s strategic positioning.
Enduring Value of Precious Metals
For centuries, precious metals have retained a unique significance in financial markets. Gold was historically the main store of value, and even after abandoning the gold standard, many investors still consider gold as “real money.” This strong reputation has led other assets, like Bitcoin (CRYPTO: BTC), to be labeled as “digital gold.”
In 2025, gold prices surged by 66%, while silver saw an even more remarkable increase of 144%. Though silver has often played second fiddle to gold due to its abundance and lower cost, its extensive industrial applications create additional demand beyond its monetary value. This includes vital uses in technologies like solar energy, electric vehicles, and data processing centers. Recognizing its importance, the U.S. Geological Survey categorized silver as a critical mineral.
Agnico Eagle Mines: A Leading Player
Agnico Eagle Mines ranks as the second-largest gold producer globally, with operations in Australia, Mexico, and Finland, but primarily situated in Canada. Key properties include the Detour Lake and Canadian Malartic mines, strategically located along the Ontario-Québec border. The company’s experience in harsh conditions in Canada’s North, particularly Nunavut, enhances its mining capabilities.
Besides its active mines, Agnico Eagle is also exploring various projects with promising potential to boost production in the long run. Notably, the company benefits from political stability, primarily operating in developed countries with established governments and clear legal frameworks, which mitigates risks found in less stable regions.
Rising gold and silver prices have yielded strong returns for Agnico Eagle and its counterparts, yet the firm’s success involves more than just favorable bullion prices. The subsequent article in this series will delve into Agnico Eagle’s competitive advantages and how it has harnessed these for financial success.
Investment Considerations
Before investing in Agnico Eagle Mines, it’s worth noting that the Motley Fool Stock Advisor team recently identified ten stocks they believe offer better investment opportunities. These stocks could potentially provide substantial returns in the future.
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