Precious metals, including gold, have performed as the leading major asset class in 2025. Despite some market apprehension, particularly toward silver, prices have kept climbing into 2026.
Companies in the precious metals sector are seeing unprecedented rallies. They are generating record or near-record cash flows, which have been used to reduce debt and increase shareholder returns through dividends and share buybacks.
Gold prices have continued to rally. Global uncertainty has strengthened gold's safe-haven appeal in 2026. Central banks are buying gold heavily to diversify away from the U.S. dollar, a trend expected to persist. Individual and institutional investors are also raising their gold allocations for diversification.
Actions by President Trump in Venezuela and threats toward Cuba and Greenland have heightened geopolitical tensions. This has contributed to rises in defense stocks and gold this year. A criminal indictment of Fed Chair Jerome Powell also triggered a surge in gold buying. While an executive order targets defense companies prioritizing dividends and buybacks over innovation, gold miners are expected to continue rewarding shareholders freely.
AngloGold Ashanti, with one of the highest dividend yields among gold miners, is under scrutiny as President Trump's policies influence the market. The stock dipped from previous levels but has soared as gold prices hit new highs.
Analysts polled by Barchart give AU a "Strong Buy" consensus rating. The stock has exceeded its mean target price of $96.28, a discrepancy attributed to its rapid rally and lagging analyst updates. Analysts may raise target prices to reflect strong gold prices, which could lead to stellar earnings for miners like AU. AngloGold trades at a forward EV-to-EBITDA multiple of 6.3x, considered reasonable given gold's outlook.
As an asset class, gold's short-term risk-reward appears favorable compared to stocks, with broad buying interest expected. A correction is anticipated later this year, but a tactical bullish stance remains on gold and mining companies. AU seems worth considering for portfolios based on gold's positive outlook.
AU investors can anticipate significant dividends this year. The company has a generous policy, paying a quarterly dividend of 12.5 cents per share and committing to distribute 50% of annual free cash flow. Last year, AU made additional payments with second and third quarter 2025 earnings instead of a year-end "true-up" payment. While this may affect the annual dividend size, payouts remain substantial. With gold prices higher than last year, 2026 dividends are expected to exceed 2025 levels.
AU remains a top pick in gold mining due to its improved portfolio and balance sheet, with dividends adding further appeal.