Higher labour costs and sticky inflation could continue to weigh on gold miners' profits going into 2025, analysts said, but soaring prices of the yellow metal should still boost free cash flow.

Gold prices rose nearly 27% in 2024, the most since 2010, and have jumped to all-time highs this year.

Analysts at Bank of America said companies under its coverage might generate free cash flow of around $3-billion in the fourth quarter, with more expected in 2025.

However, higher costs could weigh on earnings, which caused both Newmont and Barrick to miss estimates in the third quarter.

"I think we're going to have that inflation story still continue to play out in the next year or so," said Sarah Tomlinson, director of mine supply at consultancy Metals Focus, adding that labor was one of the biggest costs for miners.

Newmont missed profit estimates for the third quarter largely on higher contracted labor costs. Its all-in sustaining costs (AISC), an industry metric reflecting total expenses, rose nearly 13% from the same quarter last year.

Similarly, Barrick saw its AISC rise nearly 20%.

Fewer people are seeking out mining careers, which could also be because of the perception of the industry as dirty and polluting, according to Metal Focus' mine supply research analyst Ross Embleton.

On Wednesday, Barrick is expected to report an adjusted earnings a share of 41c for the fourth quarter, according to data from LSEG. The company had, in January, said it would "no longer be putting out preliminary production results".

Bank of America analysts expect the Canadian miner to narrowly miss its gold production guidance for 2024 on the back of its royalty disagreement with the Malian militia at its Loulo-Gounkoto mine and the "very challenged ramp-up" of the Pueblo Viejo mine in Dominican Republic.

"We assume the (Loulo-Gounkoto) mine ultimately restarts in late 2025E with ramp-up to full run-rate production in 2026E, but under less favorable economic terms for Barrick," the brokerage said in a note in January.

Mali represents 14% of Barrick's gold output and the company generated $949-million in revenue from its operations there in the first nine months last year.

Newmont is expected to report an adjusted earnings per share of $1.09, according to LSEG data, on February 20.

It could increase its dividend on the cash from its asset divestments and higher gold price but would need to balance it by its share buyback program, Scotiabank analysts said.

Analysts at Scotiabank also predicted flattish production this year compared with the last.

Overall, in the fourth quarter of last year and going into 2025, miners could focus more on margins instead of production growth, alongside cost controls, said David Hove, VP of metals & mining at Jefferies.