VanEck’s Casanova sees gold's pullback as noise, says mining stocks remain the standout trade

Gold prices continue to consolidate above $4,000 an ounce, but in her latest precious metals note, Imaru Casanova, Precious Metals Portfolio Manager at VanEck, noted that gold prices are still up roughly 22% from a year ago, when the precious metal was trading around $3,300 an ounce in July 2025.

At the same time, mining equities are up nearly 46%, compared with the S&P 500, which has gained 22%, even as valuations trade near record highs. Meanwhile, the broader commodities sector is up nearly 26%.

Although the precious metal could continue to struggle as elevated inflation pressures prompt markets to price in at least one rate hike this year, Casanova dismissed the short-term volatility as noise.

She noted that while the prospect of further central bank tightening has weighed on gold, forcing many banks to reduce their year-end price targets, analysts continue to maintain relatively bullish long-term outlooks.

“Even after those downward revisions, at present, the consensus mean estimate for average annual gold prices stands at around $4,700 for 2026 and 2027, and above $4,000 for 2028 and 2029,” she said.

“Gold price volatility and the recent pullback may be weighing on investors. However, in our view, it is important to look past near-term noise,” she added. “The continued strength in equity markets suggests a degree of optimism that could be tested. We believe investors may wish to reassess the risks associated with heightened geopolitical tensions, the prolonged effects of the Middle East conflict on the global economy and, importantly, the outlook for inflation.”

Although inflation pressures have weighed on gold during its months-long correction, Casanova said there is still time for persistently elevated consumer prices to reverse the precious metal's fortunes.

According to the latest Consumer Price Index (CPI), a sharp drop in energy prices significantly eased inflation pressures, with consumer prices falling 0.4% during the month. Headline inflation over the past 12 months rose 3.5%, down sharply from the previous month's reading of 4.2%.

Meanwhile, annual core inflation slowed to 2.6%, down from 2.9% reported in May.

Easing inflation pressures are causing markets to pare back their interest rate expectations. According to the CME FedWatch Tool, markets are now pricing in one rate hike this year, with roughly a 50/50 chance of tightening in September.

Although inflation pressures eased in June, CPI remains above the Federal Reserve's 2% target. Casanova said this environment could ultimately prove positive for gold.

“A prolonged ‘Fed on hold’ environment could contribute to lower, or even negative, real rates over time, a backdrop that has historically been among the most favorable for gold,” she said. “In that scenario, gold has often played a prominent role as a diversifier and potential hedge for investors seeking portfolio protection and diversification.”

In the meantime, as gold prices continue to consolidate, Casanova said gold equities can serve as an attractive alternative to the precious metal itself, adding that there is still significant value in the sector.

“Gold stocks continue to trade at valuations that remain low relative to historical levels, while the sector appears to be in strong financial and operational health by historical standards. Current equity prices appear to reflect more conservative assumptions than those implied by prevailing gold prices,” she said. “At current gold prices, these companies are already generating record cash flow, as Q1 2026 earnings made abundantly clear. Gold has traded at an average price of 
approximately $4,700 per ounce so far in 2026. With all-in sustaining costs for the sector estimated to average below $2,000 per ounce in 2026, margins remain very strong even at $4,000 gold. This gives companies the ability to finance growth, pay dividends and repurchase shares.”