Gold Is More Than a Safe Haven: Why Investors Are Looking at Gold Mining Stocks

Gold has long been a preferred asset for investors seeking protection during periods of economic uncertainty. But what if its value goes beyond protecting wealth when markets become unstable? According to John Hathaway, managing partner at Sprott and senior portfolio manager at Sprott Asset Management USA, gold could play a role in investment portfolios across different market conditions, not just during financial crises.

Speaking at the 2026 Precious Metals Summit in Beaver Creek, Hathaway described gold as an “all-weather” investment. His argument is that gold can help investors diversify their portfolios while offering potential long-term returns. He also sees opportunities in gold mining stocks, even if the price of gold does not rise further.

For investors, this raises an important question: could gold and gold mining companies offer opportunities beyond the traditional strategy of buying gold as a hedge against uncertainty?

Why Gold Could Play a Bigger Role in Investment Portfolios

Gold is often associated with economic uncertainty, inflation fears and financial market turmoil. When confidence in traditional investments weakens, some investors turn to gold because it is a scarce asset that is not issued by a government or company.

However, Hathaway argues that gold should not be viewed only as a crisis investment. It can also help diversify a portfolio by providing exposure to an asset that may behave differently from stocks and bonds.

He noted that gold had outperformed the S&P 500, including reinvested dividends, since 2000. This comparison highlights gold’s long-term investment potential, although it does not guarantee that gold will outperform stocks in the future.

For investors, the implication is that gold may deserve consideration even when financial markets appear relatively stable. However, its performance can still be affected by interest rates, the strength of the US dollar and changes in investor demand.

Why Gold Mining Stocks Could Offer Another Opportunity

Beyond owning gold itself, Hathaway sees potential in companies that explore for and produce the metal.

Gold mining companies can benefit when gold prices rise because their revenue may increase while some operating costs remain relatively stable. This can allow profits to grow faster than the price of gold in favorable conditions.

For example, if a mining company produces gold at a cost that remains relatively stable while the market price increases, the difference between its selling price and production cost can widen. This could improve its profitability and attract more investors.

However, the reverse is also possible. Rising fuel, labor and equipment costs can reduce miners’ profits, even when gold prices remain high. Mining stocks can also fall because of poor management, operational problems or broader stock market weakness.

Hathaway believes gold mining shares may be approaching a period of stronger performance, even without another increase in gold prices. He points to potential business growth, improved operating performance and acquisitions as factors that could support the sector.

For investors, this suggests that opportunities may exist in carefully selected mining companies rather than relying entirely on gold’s market price.

SGDM and SGDJ: Two Ways to Access Gold Miners

Investors who do not want to select individual mining companies can consider exchange-traded funds (ETFs). These funds hold a collection of investments and allow people to gain exposure to several companies through a single investment.

The Sprott Gold Miners ETF (SGDM) focuses on gold mining companies listed on US and Canadian exchanges. Its investment approach considers factors such as revenue growth and the cash a company generates after paying its operating and capital expenses.

Another option is the Sprott Junior Gold Miners ETF (SGDJ), which focuses on smaller gold mining companies. These businesses may offer greater growth potential, but they can also be more volatile and carry higher risks.

The difference matters. Established miners may offer relatively greater business stability, while smaller companies may have more room to expand but face greater financial and operational challenges.

Neither fund guarantees profits, and investors should consider fees, holdings, volatility and investment objectives before committing capital.

What Investors Should Watch

Gold’s long-term performance and the outlook for mining stocks offer reasons to examine the sector, but neither investment is without risk. Changes in interest rates, the US dollar, production costs and global economic conditions can influence returns.

Investors should also remember that diversification can reduce dependence on a single asset, but it cannot eliminate losses.

The bigger takeaway is that gold may offer more than a defensive position during market turmoil. It can also serve as a diversification tool, while gold mining stocks provide another way to participate in the precious metals industry.

For investors, the opportunity lies not in assuming that gold will always rise, but in understanding how gold and mining companies fit into a broader investment strategy.