Gold and silver prices have been soaring higher in recent months. Gold hit record highs over $5,500 per ounce and silver soared past $100 per ounce for the first time.
Enter FTSE 100 miner, Fresnillo (LSE:FRES). This mining giant digs up gold and silver, mainly in Mexico. Over the past year, its share price rocketed higher by 430%. That’s insanely good for a FTSE 100 share as the average for the index was around 22%.
Over the past five years, it has even beaten Rolls-Royce shares, which might seem hard to believe given that company’s post-pandemic strength.
FTSE 100 top performer
But can Fresnillo continue its meteoric rise in 2026?
Well, that depends on whether demand for gold and silver continues to climb. Rising gold prices have been driven by central banks snapping up the shiny metal, a weaker US dollar, and geopolitical tensions.
As for silver, it tends to move even more dramatically than gold. Some even call it ‘gold on steroids’. Like gold, silver is also seen as a safe haven in times of uncertainty. But in contrast, it has strong industrial uses too. For instance, it’s used in solar panels, electric vehicles, and AI data centres. All of which are expected to be high-growth sectors for the coming years.
In the past, when precious metals have seen explosive rallies, they could become quite volatile. Prices can swing wildly in both directions. They could also experience profit-taking in the short term.
That said, many experts expect medium- to long-term trends to push prices upward. Many major banking institutions target over $6,000 for gold and over $150 for silver this year.
As for Fresnillo, its direct tie to commodity supercycles like the one we could be experiencing now make it a standout for continued outperformance in 2026. It delivered robust 2025 results, but recent downward revisions to 2026 output have introduced some caution.
Leveraged play on gold and silver
As a low-cost operator, it remains competitive and offers profit margin resilience and strong cash-flow generation. A return on capital employed of over 17% suggests good use of capital. And a forward price-to-earnings ratio of 30 is in line with historical averages during bull cycles. As a bonus, Fresnillo also offers a 2% dividend yield.
But bear in mind, if prices for precious metals reverse for an extended period, Fresnillo shares could suffer in the near term.
That’s why I would only own it as part of a balanced and diversified portfolio. FTSE 100 shares are typically large, mature, and established companies that don’t often witness triple-digit returns.
But now and again, there are outliers. In the past year, there were six FTSE 100 shares that resulted in returns of over 100%.
Whether we’ll see a repeat in 2026 is unknowable, but certainly possible. That said, after any near-term volatility in precious metals prices, I think long-term trends will continue to support them. That should bode well for Fresnillo in 2026.
