Gold-Stock Green Shoots

Adam Hamilton, CPA

The violent gold-stock swings in these past couple months have been breathtaking.  This wild sector crashed, soared to records, cratered, then surged again, whipsawing jarringly.  But this tempestuousness looks to have paved the way for another nice run higher.  Fittingly with spring underway, gold stocks are showing technical, seasonal, and fundamental green shoots.  They have real potential to grow into big gains.

For speculators who crave action, it’s hard to beat gold stocks’ year-to-date roller coaster.  From its final close of 2025 into late January, the dominant GDX gold-stock ETF rocketed up 30.8% achieving many new all-time record highs.  That blistering run stretched GDX an all-time-record 67.4% above its baseline 200-day moving average, the most extreme overboughtness it has ever witnessed!  Then gold stocks crashed.

GDX plummeted 17.6% into early February, including a single soul-crushing 12.7% down day which was this benchmark’s 7th-worst ever!  But gold stocks did a hard turn-one-eight out of that, soaring 25.3% into the end of that month reaching still more new record closes.  Then through much of March, heavy selling returned with a vengeance as GDX cratered 30.8%!  Such compressed big-and-fast swings are quite unusual.

Yet despite such brazen whipsawery, GDX was still up 11.9% year-to-date as of midweek trouncing the S&P 500’s 3.9% loss.  And the relentless selling in March including huge 8.8%, 6.1%, 6.3%, and 5.9% down days went far in rebalancing away preceding greedy herd sentiment.  So gold stocks look more bullish today than they have in over a year!  We started redeploying in great smaller ones several weeks ago.

Gold stocks’ green-shoot bullish case today is three-pronged, technical, seasonal, and fundamental.  Yet as usual it all depends on gold.  Last week I wrote an essay analyzing gold’s war disconnect.  The upshot was gold’s own brutal selloff in mid-March resulted from festering extreme overboughtness in February, not Trump’s Iran war.  The latter is quite bullish for gold, baking in much-higher inflation and lower stock markets.

And regardless of overwhelming US military superiority, Iran can use its endless asymmetric-warfare capabilities to continue greatly retarding the critical flow of shipping through the Strait of Hormuz almost indefinitely.  Each passing week of drastically-pinched traffic including crucial crude oil, LNG, fertilizer, helium, sulfur, and aluminum from the Persian Gulf ratchets up this snowballing global economic crisis.

So gold sure ought to continue grinding higher on balance as this serious quagmire drags on.  And gold stocks will leverage its gains like usual.  But if gold instead rolls over into a bear market for some reason, the miners will be pounded lower.  Generally the majors in GDX tend to amplify material gold moves by 2x to 3x.  This gold-stock green-shoot thesis is strong, but hinges on gold behaving and generally rallying.

Starting with technicals, check out this GDX chart of recent years.  Through 2024 and much of 2025, GDX was climbing with its metal in a modest uptrend.  But starting in early August last year, GDX took off like a rocket establishing a much-steeper one.  That was shattered in mid-March 2026, as gold stocks plummeted near their 200dma before staging a neck-snapping V-bounce.  This setup is looking surprisingly bullish.

From early October 2023 to late January 2026, GDX soared 332.9% higher in a heck of a bull run!  While a quadrupling-plus in just 27.8 months is impressive absolutely, gold stocks still really underperformed the metal which overwhelmingly drives miners’ profits.  Gold’s monster record cyclical bull in that span accrued epic 196.4% gains, which GDX only leveraged a poor 1.7x.  Again the historical average of 2x to 3x is way better.

And usually the bigger a gold upleg, the more gold-stock enthusiasm grows fueling bigger leverage.  Had GDX amplified gold by 3x+ in recent years, gold stocks would likely be so overvalued they wouldn’t have a bullish case today.  But their serious underperformance during gold’s biggest bull ever in dollar terms leaves them primed for massive catch-up gains in coming years.  That reversion may already be underway.

GDX’s record overboughtness in late January was super-bearish for this sector.  I warned about gold’s parallel speculative mania at the time, cautioning of an imminent big-and-fast-selloff reckoning that gold stocks would likely amplify 2x to 3x.  So if gold plunged its historical average 20.8% over 2.1 months like after its next-ten-largest bulls since 1971, GDX would likely face utterly-catastrophic 40% to 60% losses!

But likely thanks to this worst energy shock ever spawned by Trump’s Iran war, gold’s drawdown looks to have been truncated.  At worst into late March, gold plunged 18.6% in 1.8 months.  And impressively gold stocks fared far better than their history suggested, with GDX merely falling 26.6% in that span for really-mild 1.4x downside leverage.  But within gold’s overdue drawdown, GDX plummeted 30.8% in only three weeks!

That all cascaded from GDX’s latest record close exiting February to a deep low on March’s third Friday, a super-condensed violent selloff.  That made for 1.66x downside leverage to gold’s entire drawdown, remarkably symmetrical with the 1.69x in recent years’ mighty bull run!  If gold stocks only managed 1.7x on the way up, 1.7x back down could prove sufficient for rebalancing recent extreme technicals and sentiment.

Again in late January GDX hit a record high of extreme overboughtness closing an eye-popping 67.4% above its 200dma!  I wouldn’t have touched this sector with a ten-foot-pole then, as history screamed for a subsequent plummeting which started with that single-day crash.  Yet by March’s third Friday as GDX collapsed, it closed at just 5.0% above its 200dma!  Realize that certainly wasn’t oversold, which is a caveat.

During the past five years, extreme oversoldness marking incredible low-risk buying opportunities happened once GDX fell 15%+ under its 200dma.  Mid-March was nothing like those unfortunately.  But that 5.0% above was still this leading gold stock benchmark’s least-overbought close since 12.7 months earlier in late February 2025.  And that proved a great time to buy gold stocks, as GDX soared 114.0% into mid-October!

Gold stocks’ recent lows weren’t a great contrarian buy-super-low opportunity, but they are increasingly looking like a good buy-lower one.  GDX had just shed nearly a third of its value in only several weeks, which not only gutted extreme technicals but mostly obliterated late February’s greedy herd sentiment.  In mid-March as we launched a new gold-stock trading campaign in our weekly newsletter, sector fears ran rampant.

Recent years’ monster gold bull saw plenty of precedent of extreme overboughtness being followed by milder selloffs then longer high consolidations rather than normal deeper selloffs.  These drifts resulted in good buying opportunities above gold’s 200dma instead of below it.  That resilient technical behavior was largely fueled by strong investment demand globally, with big buying on weakness truncating younger selloffs.

Gold stocks mirrored and amplified their metal like usual, with GDX similarly tending to bottom at less-overbought levels instead of oversold ones.  That impressive phenomenon could very well be continuing today, as gold investment demand still looks robust.  American stock investors remain incredibly underinvested in gold as discussed in last week’s essay, so they have vast buying to do in the looming war inflation.

The seasonal component to gold stocks’ green-shoot bullish case meshes well with this technical one.  Each year from mid-March to early June, both gold and gold stocks tend to enjoy spring rallies.  I haven’t had time yet to update my seasonal research thread to include 2025, and hope to soon.  But a year ago I analyzed the previous iteration up to 2024.  In all modern gold-bull years since 2001, gold averaged 3.8% spring rallies.

That is actually gold’s weakest seasonal rally of the year, well behind its 5.2% average autumn rallies and 7.6% average winter rallies.  But the interesting thing about this young spring-rally span is gold stocks enjoy their strongest seasonal leverage to their metal of the year.  As of a year ago, on average major gold stocks blasted 12.0% higher from mid-March to early June amplifying gold’s underlying gains by 3.1x!

Why that occurs is a longer diversion that will have to wait for my next gold-stock-seasonals essay.  But for now realize the miners’ strong spring seasonals could prove a stiff tailwind for this sector in coming months.  That buttresses the far-more-important technical and fundamental cases underpinning the green shoots in gold stocks.  And I saved the best for last, as the latter is no doubt the most compelling of all.

I’ve been intensely studying and actively trading gold stocks professionally for a quarter-century now.  As far as work goes, my happy place is being neck deep in quarterly reports building spreadsheets to collate and analyze companies’ results.  The resulting knowledge helped fuel our stellar newsletter-stock-trade track record.  Over 25 years we’ve realized 1,621 of those, averaging phenomenal +20.4% annualized gains!

My latest essay detailing the GDX-top-25 gold miners’ Q4’25 fundamentals was published just under a month ago.  Incidentally I concluded then warning “…gold stocks’ ongoing decent valuations doesn’t mean they are great buys today, that totally depends on gold’s fortunes. … if gold rolls over hard in a rebalancing selloff, they will get crushed.”  So GDX’s brutal plummeting in March wasn’t too much of a shock.

Still the major gold miners’ Q4 fundamentals proved astonishingly-record-shattering.  The best metric for distilling down their performance as a sector simply subtracts their quarterly-average mining all-in sustaining costs per ounce from quarterly-average gold prices.  As analyzed in depth then, that skyrocketed 106.3% year-over-year to a record $2,490 per ounce!  Gold miners were earning money hand-over-fist in Q4.

If that kind of quarterly performance was isolated, it would have been awesome.  But it was actually just the latest in an astounding ten-quarter streak where GDX-top-25 implied unit earnings soared 87%, 47%, 31%, 75%, 74%, 78%, 90%, 78%, 83%, and that 106% YoY!  There can’t be any other sector in all the stock markets remotely close to that kind of consistent massive outperformance.  Gold miners are booming.

They generally report their quarterly results from four-to-six weeks after quarter-ends, so Q1’s will come out from late April to mid-May.  That’s right in the middle of this strong spring-rally timeframe.  And those latest results will again prove utterly-record-shattering, which should fuel considerable institutional interest in this amazing sector.  Despite gold’s wild volatility recently, in Q1’26 it still averaged a stellar record $4,873.

That not only soared 17.4% sequentially from Q4’25’s previous record of $4,150, but skyrocketed 70.0% YoY from Q1’25!  While last quarter’s epic average gold price is already written in the books, the GDX-top-25 gold miners’ average AISCs aren’t.  But their average full-year-2026 AISC-guidance midpoints are running $1,788 per ounce.  That may be low for Q1, since Q1s see gold miners’ lowest production of the year.

That mainly has to do with winters in the northern hemisphere, where most of the world’s land masses and gold mines are located.  Winter weather slows mining operations, from bitter cold up north to heavy rains down south reducing the efficiencies of chemical reactions to recover gold from ores.  And as mines’ ore-processing capacities are fixed, unit mining costs are inversely proportional to gold recovered in any quarter.

Over the last five years ending Q1’25, the GDX top 25’s AISCs have averaged 1.1% QoQ rises from Q4s to Q1s.  A similar climb from their lower Q4’25 AISCs of $1,661 only implies $1,679.  But with many guiding to higher mining costs this year, to be very conservative let’s assume Q1’26’s shake out near $1,900 well above midpoint guidance.  That still suggests major gold miners could earn about $2,973 per ounce in Q1’26!

That would prove another dazzling all-time record smashing Q4’25’s $2,490, and make for another epic doubling with a 102% YoY gain!  Q1 will absolutely prove gold miners’ 11th consecutive quarter of utterly-enormous earnings growth.  Sector unit profits doubling again will smash valuations proportionally lower.  And plenty of the good smaller mid-tier and junior gold miners we specialize in are already undervalued.

Some of the half-dozen new trades added in our weekly newsletter in the last several weeks already had great trailing-twelve-month price-to-earnings ratios in the low teens!  Earnings doubling again in these upcoming Q1’26 results will leave gold stocks even more undervalued relative to gold miners’ profits.  So as long as gold behaves and doesn’t roll over into a bear, gold miners’ fundamental case remains really bullish.

Professional fund investors increasingly paying attention to this high-flying sector will notice these coming epic record results starting late this month, and will likely boost their sector capital allocations.  While most retail investors don’t have the time or expertise to follow quarterlies closely, they will still see gold stocks rallying and want to chase those gains.  Combine all this, and there are lots of gold-stock green shoots sprouting.

The bottom line is bullish gold-stock green shoots are sprouting.  Gold stocks’ brutal thrashing in March pummeled GDX to its least-overbought levels in over a year.  That went a long way toward rebalancing late February’s extreme technicals and greedy herd sentiment.  And the miners and their metal are now early in their usual spring-rally strong season, during which gold stocks exhibit their biggest seasonal leverage.

Most importantly of all, gold miners’ fundamentals are phenomenal with upcoming record Q1 results likely to reveal another doubling in sector unit earnings.  That will force largely-undervalued price-to-earnings ratios even lower, attracting more fund investors.  This all makes for a quite-bullish gold-stock outlook in coming months, as long as gold continues grinding higher on balance which it ought to for various reasons.

Adam Hamilton, CPA

April 3, 2026
Copyright 2000 – 2026 Zeal LLC (www.ZealLLC.com)