2 UK shares that could outperform as gold hits a record $4,000
Today (8 October), the gold price hit fresh record highs above $4,000. It marks an impressive run over the course of this year, up 53%. Yet it’s not just the precious metal that has been soaring, but also UK shares that are somehow linked to it. Here are two examples that could continue to move higher this year.
LatAm Mining
The first company is Hochschild Mining (LSE:HOC). It’s a UK-based operator specialising in gold and silver, primarily in Latin America. Over the past year the growth stock is up 103%, highlighting the benefit of the surging gold price already.
With high gold prices, Hochschild generates more revenue on each ounce mined, improving cash flow and profitability. The H1 2025 results showed this, with revenue up 33% versus last year to $520m.
Even though management cut its full-year gold production guidance due to issues at the Mara Rosa mine in Brazil, the fundamentals of the business are still positive. The increased profit before tax enabled it to reduce net debt, which currently stands at a very manageable $202.3m.
Looking ahead, if gold prices stay elevated, the company can maintain or increase dividends, reinvest in capacity, and improve production. The company will only report the financial benefits of the jump to $4,000 later this year or even early next year. Therefore, I believe there’s scope for the stock to appreciate further over this time period as investors recognise the tangible benefits.
One risk is if new exploration projects don’t yield any results. This could hinder further long-term growth plans and prompt investors to reassess their strategies.
A precious metals giant
Another idea is Fresnillo (LSE:FRES). If you thought the Hochschild return was impressive, consider the fact that Fresnillo stock is up 268% in the past year!
Fresnillo is one of the largest precious metal miners listed in London. Itâs the worldâs largest primary silver producer but also a major gold producer, operating several big mines in Mexico. Therefore, it has benefitted not just from the gold move but also from the similar increase in the silver price.
In a similar way to Hochschild, rising gold prices push up the companyâs revenue significantly since Fresnillo sells gold (and silver). As costs remain relatively fixed, higher prices mean higher profit margins. As gold prices have rallied, Fresnillo shares have seen strong gains.
An advantage for Fresnillo is that, due to the existing size and scale it boasts, it can alter production and capacity more easily than smaller companies. Therefore, it could flex its muscles to really take advantage of gold being above $4,000 right now.
A concern is operations in Mexico. It’s known for political and social unrest, which can spill over into business operations. It’s unlikely to go away any time soon, but it needs to be factored in to any investment.
I think both shares stand to do well as gold continues to push on, and think investors can consider both for their portfolios.
The post 2 UK shares that could outperform as gold hits a record $4,000 appeared first on The Motley Fool UK.
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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
