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Gold and silver prices have been rising sharply in recent months. Gold hit a record high above $5,500 per ounce and silver rose above $100 per ounce for the first time.
Come in FTSE 100 miner, Fresnillo (LSE:FRES). This mining giant digs for gold and silver, mainly in Mexico. Over the past year, its share price has increased by 430%. That’s surprisingly good for the FTSE 100 share as the index average was around 22%.
In the last five years, it has been hit Rolls-Royce shares, which may seem hard to believe given the company’s post-pandemic strength.
The FTSE 100 is doing very well
But can Fresnillo continue its meteoric rise in 2026?
However, that depends on whether the demand for gold and silver continues to rise. The rise in gold prices has been driven by central banks taking on the shiny metal, a weak US dollar, and political tensions.
As for silver, it tends to move more than gold. Some even call it ‘gold on steroids’. Like gold, silver is also considered a safe haven in times of uncertainty. But on the contrary, it has a strong industrial use as well. For example, it is used in solar panels, electric cars, and AI data centers. All are expected to be the fastest growing sectors in the coming years.
In the past, when precious metals saw explosives, they could fluctuate wildly. Prices can swing wildly in both directions. They can also earn profits in a short period of time.
That said, most experts expect medium to long-term trends to increase prices. Most major banking institutions are targeting over $6,000 in gold and over $150 in silver this year.
As for Fresnillo, its direct correlation with commodity supercycles like the one we may be experiencing now makes it prime for continued performance in 2026. It delivered strong results for 2025, but the recent revision of the decline in production for 2026 introduced some caution.
Usable play with gold and silver
As a low-cost operator, it remains competitive and offers solid profit margins and strong cash flow generation. A return on capital employed above 17% suggests a good use of funds. And the forward price-to-earnings ratio of 30 is consistent with historical ratios during bull cycles. As a bonus, Fresnillo also offers a 2% dividend yield.
But remember, if the prices of precious metals decline for a long time, Fresnillo shares may suffer in the near term.
That’s why I can only own it as part of a balanced and diversified portfolio. FTSE 100 stocks are generally large, mature, and established companies that rarely witness triple-digit returns.
But now again, there are outliers. Over the past year, there were six FTSE 100 stocks that led to a return of more than 100%.
Whether we will see a repeat in 2026 is unknown, but it is possible. That said, after any near-term volatility in precious metal prices, I think the long-term trends will continue to support them. That should bode well for Fresnillo in 2026.
