⚠ Buying Ounces at the Top of the CycleModerate threat
Barrick Mining (B) — threat to the moat
The gold industry buys at the top because that is when it has the cash and the confidence, and writes the purchases down about four years later.
The gold industry's record on acquisitions is genuinely poor, and the pattern is consistent: companies buy at the top, because that is when they have the cash and the currency and the confidence, and then write the purchases down when the price falls.
Barrick has lived both sides of it. The Randgold merger in 2019 was executed near a cyclical low and is widely regarded as one of the better deals in the sector; the acquisitions of the previous cycle produced the write-downs that culminated in a $10.4 billion loss in 2013.
Today's conditions are the dangerous ones. With gold having averaged $3,431 an ounce in 2025 and a record fourth-quarter average of $4,1351, every asset in the industry is being valued on cash flows that assume the current price persists. A seller has no reason to accept less, and a buyer paying that price is making a leveraged bet on the metal rather than on the asset.
Barrick's stated posture is the right one — it has been returning capital through buybacks and dividends rather than announcing acquisitions, and its growth pipeline is internal.
The falsifier is behavioural and easy to observe. A large cash acquisition announced while gold is at a record would say the discipline described on the moat pages belongs to a previous management, and the write-down would arrive about four years later.
- ReportedGold averaged US$3,431.5/oz in 2025 with a record Q4 average of US$4,135.2/oz, so assets are being valued on cash flows that assume the current price persists.World Gold Council, Gold Demand Trends Q4 and Full Year 2025 — total gold demand including OTC exceeded 5,000t for the first time, worth an unprecedented US$555bn (+45%), with the LBMA gold price setting 53 new all-time highs during 2025; the annual average price was US$3,431.5/oz (+44%) and the Q4 average a record US$4,135.2/oz (+55%). Supply: mine production a record 3,671.6t (+1%), net producer hedging -73.6t, recycled gold 1,404.3t (+3%) — described as a relatively muted response to a 67% increase in the US dollar gold price — for total supply of 5,002.3t. Demand: jewellery fabrication 1,638.0t (-19%) and jewellery consumption 1,542.3t (-18%) with jewellery demand value up 18% to a record; bar and coin 1,374.1t (+16%), a 12-year high; ETFs and similar products +801.2t against -2.9t in 2024, the second strongest year on record; central banks and other institutions 863.3t against 1,092.4t, at the upper end of the expected range, historically elevated and geographically widespread but slowed from their recent pace — FY2025 · publ. 2026-01-29 · source ↗