The best-performing FTSE 100 growth stock of 2025 rocketed around 400%. That’s an extraordinary return, up there with the best of US tech. Yet this barnstorming performer isn’t a technology company, or even an American one, but an often overlooked British blue-chip.
It’s Fresnillo (LSE: FRES), the Mexico-focused gold and silver miner. Last year it soared along with precious metals prices. I have a gaping absence in my portfolio: no gold. Fresnillo made me realise what I was missing, but I also feared it was too late to pile in after such a spectacular run.
Now I’m wondering whether I finally have that opportunity.
Gold has lost its shine
The gold price rose around 64% in calendar 2025, its strongest performance since 1979. Investors piled into the precious metal as geopolitical tensions and trade wars intensified, the dollar weakened and interest rates fell.
In January, gold hit an all-time high of around $5,595 an ounce. I wasn’t buying at that price, and I’m glad I didn’t. Today, the price is $3,875, a fall of roughly 30%.
The reversal has been driven by a stronger dollar and soaring bond yields, which make interest-paying assets more attractive than gold that has no yield. Investors have also been taking profits after the extraordinary rally.
Fresnillo has suffered too. Its shares are down 33% this year, following a brutal 16.6% fall in October. That was the second-biggest dip on the FTSE 100.
A tempting price, but risks remain
I like buying shares when they’re down. It allows me to pick up more stock at a lower price, then wait for recovery. It requires patience and isn’t an exact science. I’ve bought too early before, notably with Diageo and JD Sports.
That could happen here. Gold’s problems may persist, as inflation, high interest rates and a strong US dollar continue to squeeze the price. Fresnillo could fall further.
A miner isn’t purely a bet on bullion. Accidents, production slips, rising energy and labour costs, lower ore grades and political or regulatory problems can all hit profits.
Fresnillo looks reasonably valued, with a price-to-earnings ratio of 15.8. Its trailing dividend yield is 4.26%, giving me some income while I wait. I wouldn’t get that if I bought actual gold, although dividends are never guaranteed.
I’m watching closely
Recent gold weakness is a little puzzling given that US technology stocks are falling too. Normally, investors turn to gold when markets panic. I’m wondering if gold is no longer the safe haven of yore, but a momentum trade in its own right that may be sold alongside shares, especially if savers need cash.
Today’s political, economic and geopolitical risks are huge. I want some long-term gold exposure in my portfolio, and this sell-off is giving me the chance to get it. I’m watching Fresnillo like a hawk and plan to buy its shares in the days or weeks ahead. This FTSE 100 growth stock is also sliding, and is well worth a look…
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Harvey Jones owns shares in Diageo and JD Sports.
This story originally appeared on Motley Fool
