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Gold and silver costs have been hovering increased in latest months. Gold hit document highs over $5,500 per ounce and silver soared previous $100 per ounce for the primary time.
Enter FTSE 100 miner, Fresnillo (LSE:FRES). This mining big digs up gold and silver, primarily in Mexico. Over the previous 12 months, its share value rocketed increased by 430%. That’s insanely good for a FTSE 100 share as the typical for the index was round 22%.
Over the previous 5 years, it has even crushed Rolls-Royce shares, which could appear onerous to consider provided that firm’s post-pandemic energy.
FTSE 100 high performer
However can Fresnillo proceed its meteoric rise in 2026?
Nicely, that depends upon whether or not demand for gold and silver continues to climb. Rising gold costs have been pushed by central banks snapping up the shiny metallic, a weaker US greenback, and geopolitical tensions.
As for silver, it tends to maneuver much more dramatically than gold. Some even name it ‘gold on steroids’. Like gold, silver can also be seen as a secure haven in occasions of uncertainty. However in distinction, it has sturdy industrial makes use of too. For example, it’s utilized in photo voltaic panels, electrical automobiles, and AI information centres. All of that are anticipated to be high-growth sectors for the approaching years.
Up to now, when treasured metals have seen explosive rallies, they may turn out to be fairly risky. Costs can swing wildly in each instructions. They might additionally expertise profit-taking within the brief time period.
That stated, many specialists anticipate medium- to long-term tendencies to push costs upward. Many main banking establishments goal over $6,000 for gold and over $150 for silver this 12 months.
As for Fresnillo, its direct tie to commodity supercycles just like the one we may very well be experiencing now make it a standout for continued outperformance in 2026. It delivered sturdy 2025 outcomes, however latest downward revisions to 2026 output have launched some warning.
Leveraged play on gold and silver
As a low-cost operator, it stays aggressive and provides revenue margin resilience and powerful cash-flow era. A return on capital employed of over 17% suggests good use of capital. And a ahead price-to-earnings ratio of 30 is in step with historic averages throughout bull cycles. As a bonus, Fresnillo additionally provides a 2% dividend yield.
However keep in mind, if costs for treasured metals reverse for an prolonged interval, Fresnillo shares may undergo within the close to time period.
That’s why I’d solely personal it as a part of a balanced and diversified portfolio. FTSE 100 shares are sometimes massive, mature, and established corporations that don’t typically witness triple-digit returns.
However from time to time, there are outliers. Up to now 12 months, there have been six FTSE 100 shares that resulted in returns of over 100%.
Whether or not we’ll see a repeat in 2026 is unknowable, however actually doable. That stated, after any near-term volatility in treasured metals costs, I feel long-term tendencies will proceed to assist them. That ought to bode properly for Fresnillo in 2026.
