Gold Miners Set for Q2 Profit Growth as Higher Prices Offset Rising Costs

Gold mining companies are poised to report a substantial rise in second-quarter profits, buoyed by significantly higher bullion prices compared to last year. However, investors will be closely watching for the impact of rising energy costs, which analysts believe may have weighed on the sector's earnings growth.

Higher Prices Drive Profit Expectations

The primary driver for the upbeat forecast is the strength in the gold market. According to a Reuters report citing LSEG data, average gold prices rose approximately 37% year-over-year to $4,506.41 an ounce during the second quarter. This price strength supported earnings even as bullion retreated more than 14% from its record high of $5,594.82 set in January.

Reflecting this trend, the world's two largest producers, Newmont and Barrick Gold, are projected to post a combined profit of nearly $3.5 billion, a significant increase from $2.4 billion in the same period a year earlier, according to the LSEG data.

Cost Pressures and Capital Returns

Despite the favorable pricing environment, higher operating costs, particularly for energy, are expected to be a key theme this earnings season. These cost pressures could moderate the margin expansion from higher gold revenues.

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Even with these headwinds, major producers are expected to maintain strong balance sheets and generate substantial free cash flow. This financial strength has put shareholder returns in focus, with Scotiabank forecasting significant share buybacks from companies like Newmont, Barrick, Agnico Eagle Mines, and Kinross Gold.

Analyst and Investor Outlook

Analysts note that the sector remains financially robust. "Gold producers remain in a position of strength, with most carrying net cash positions, returning capital to shareholders and guiding to stronger operating performance in the second half of 2026," said RBC analyst Josh Wolfson, as quoted by Reuters. However, Wolfson also cautioned that second-quarter earnings could still be "mixed" due to challenging sequential comparisons.

Investors will also be monitoring operational execution at Newmont, the world's top gold producer. The company has been undergoing a management overhaul under CEO Natascha Viljoen, including the June appointment of Brian Tabolt as CFO. BMO Capital Markets noted that the changes reduce uncertainty and position Newmont for improved performance. Newmont is scheduled to report its results on Thursday, followed by Agnico Eagle and Kinross on July 29 and Barrick on August 10.