Gold Miners Stack Records

By Adam Hamilton, CPA

The gold miners continue to stack records, on the verge of reporting their best quarterly results ever.  And remarkably Q2’25 will prove the fifth quarter in a row they’ve accomplished that.  These high prevailing gold prices are fueling epic windfall profits for gold miners, driving fantastic fundamentals.  Investors are starting to recognize those, with gold stocks really outperforming their metal in its recent high consolidation.

Right after every quarterly earnings season, I analyze the latest results reported by the 25 largest gold miners of the flagship GDX gold-stock ETF.  I’ve been advancing this important fundamental-research thread for 36 consecutive quarters, and really look forward to each new chapter.  While they require way more time and work than technical studies, the resulting fundamental insights are well worth the effort.

My last GDX-top-25 quarterly-results essay covered Q1’25’s in mid-May.  We’re only halfway to the next one in mid-August, as gold miners report their latest results from four to six weeks after quarter-ends.  But with Q2 almost fully written into the books now, it is going to be spectacular for gold miners.  After almost a decade into this fundamental research, all that experience has made the GDX top 25’s results more predictable.

I skim/read each gold miner’s quarterly or annual report, pulling lots of data that’s fed into a massive spreadsheet.  The more it grows, the more valuable it gets for analyses.  Some years ago a fund offered me a king’s ransom for that extensive historical gold-stock data, which I turned down.  With every passing quarter of new results added, the overall analyses grow deeper and more profound.  I can’t wait to see Q2 results.

Much of gold miners’ operating and financial performances can be distilled down into a simple proxy.  It subtracts the GDX top 25’s average all-in sustaining costs from the quarterly-average gold price, yielding sector implied unit profits.  How much the major gold miners are earning per ounce as a group is a great reflection of far-more-extensive underlying fundamentals.  And this metric can be reasonably estimated in advance.

Q2’25 is effectively over, with just a handful of trading days left after Wednesday’s data cutoff for this essay.  Quarter-to-date gold has averaged an astounding record $3,284, and that’s not going to change much.  This is gold’s highest-ever quarter by far, trouncing Q1’25’s previous record of $2,866.  And these quarterly-average gold prices soared a colossal 41% YoY from Q2’24, the biggest gain in at least 36 quarters!

Predicting the GDX-top-25 gold miners’ all-in sustaining costs is much more involved, but still estimable.  In the preceding Q1’25, those averaged $1,396 per ounce.  Over the past four reported quarters, they’ve averaged a very-similar $1,380.  These major gold miners giving full-year-2025 AISC guidances averaged $1,426.  So there’s a reasonable degree of certainty Q2’s will come in somewhere between $1,375 to $1,425.

I suspect they will be on the lower side due to quarterly-gold-output dynamics.  All-in sustaining costs are inversely correlated with production.  Higher outputs spread the big fixed costs of mining across more ounces, lowering per-ounce costs.  And surprisingly there’s seasonality involved with global gold-mining output, it’s not constant as most assume.  The World Gold Council’s comprehensive quarterly data shows that.

Going back to Q1’11, global mined-gold production in Q1s, Q2s, Q3s, and Q4s has averaged sequential quarter-over-quarter changes of -8.9%, +4.7%, +6.5%, and +0.6%.  Q1s are always the weakest quarters of the year, mostly due to winters.  The northern hemisphere contains over 2/3rds of the world’s land masses, and a proportional amount of its gold mines.  Cold and wet winter weather retards gold mining.

Up north colder temperatures reduce the efficiencies of heap-leach chemical reactions to recover gold from crushed ores.  Heavy rains down south also dilute solutions reducing recoveries, and sometimes slow truck access to mining pits.  Mine managers take advantage of slower Q1s to do necessary plant maintenance, sometimes taking them offline.  Then operations can run at full tilt for the rest of the year.

So Q2s see that big average 4.7% production jump from Q1s, which lowers AISCs.  If precedent holds and that is strictly proportional, that implies GDX-top-25 AISCs falling to $1,330 in Q2.  A year ago in Q2’24, they ran an excellent $1,239!  But to be conservative, let’s assume they merely edge 1.5% lower QoQ to $1,375 per ounce in this current ending quarter.  Holy cow gold miners’ implied unit profits will be epic.

This quarter’s $3,284 average gold price less $1,375 GDX-top-25 average AISCs would yield super-rich earnings of $1,909 per ounce!  That would prove the highest ever by far for the major gold miners, utterly shattering Q1’25’s previous record of $1,470.  And that would soar 74% YoY from Q2’24’s $1,099.  This would be spectacular even if it was a one-off windfall quarter, but it’s the latest in a long line of great ones.

Over the last seven reported quarters starting in Q3’23, the GDX top 25’s implied unit earnings rocketed up 87%, 47%, 31%, 84%, 74%, 78%, and 90% YoY!  Q2’25’s probable 74% merely adds on to that truly-extraordinary streak.  No other sector in all the stock markets has enjoyed such colossal profits growth.  Yet because gold stocks are a small contrarian sector, they’re largely overlooked by the great majority of investors.

Many are now trading at teens or even single-digit trailing-twelve-month price-to-earnings ratios!  That’s already dirt-cheap even before those spectacular Q2 results are factored in.  Professional fund managers are starting to understand this, and they remain wildly underdeployed in gold stocks.  There’s a good chance those fantastic new quarterly reports from late July to mid-August will drum up more sector interest.

With gold miners stacking records, the recognition of their amazing fundamentals is mounting.  Case in point is gold stocks’ technical behavior over these last couple months.  Usually gold-stock price action is slaved to that of the metal overwhelmingly driving their profits.  The major gold stocks dominating GDX tend to amplify material gold moves by 2x to 3x.  And gold has mostly been drifting sideways since mid-April.

Back then it rocketed to crazy-overbought extremes on frenzied Chinese gold buying in fear of Trump’s embargo-grade 145% reciprocal tariffs on China.  April 21st was only the third trading day since January 2011 where gold soared 26%+ above its baseline 200-day moving average!  After similarly rallying too far too fast to be sustainable in the past half-century, gold averaged big-and-fast corrections of 15.5% over 1.9 months.

But gold proved able to overcome precedent consolidating high since mid-April, merely slumping into a 7.1% pullback at worst in mid-May!  Yet GDX proved resilient in that span, only correcting 11.8% making for mild 1.7x downside leverage.  And as this chart shows, GDX actually forged up to major new secular highs in June while gold largely ground sideways!  That means gold stocks have enjoyed capital inflows.

In mid-April as gold rocketed to those crazy-overbought extremes, GDX surged to a 12.5-year secular high of $51.91.  Then it suffered that small correction with gold’s pullback into mid-May, but bounced at its 50dma which is bullish technically.  The major gold stocks recovered with their metal from there, but well exceeded its performance.  It’s unusual if not rare for GDX to materially advance as gold drifts sideways.

At best in gold’s entire high consolidation since mid-April, gold edged a trivial 0.3% above that initial close on Friday June 13th.  That was the day after Israel’s surprise attack on Iran attempting to destroy its nuclear-weapons program.  Just rallying 1.3% the next day, gold couldn’t overcome its drifting trend in the seasonally-weak summer doldrums.  And GDX merely climbed 1.7% on that for meager 1.3x upside leverage.

Yet that still boosted this flagship gold-stock ETF to a $54.46 close that day, a fresh 12.7-year secular high.  More importantly across gold’s eight-week-old high-consolidation span, GDX had rallied 5.4% to gold’s mere 0.3%!  It was surprising seeing gold-stock buyers come in while gold was still mired in that high consolidation.  Even more impressive was that happening in June when investors check out for summer fun.

And I suspect gold stocks’ outsized strength this month has been fueled by fund buying.  Being in the financial-newsletter business for 26 years now, I’ve honed a great feel for herd sentiment.  I’m blessed to study the markets all day every day, and have Bloomberg and CNBC on in my office all the time.  I also get much feedback from speculators and investors around the world, offering insights into their gold-stock views.

My perception of gold and gold-stock psychology over this past month is one of serious apathy.  This contrarian sector hasn’t been getting much financial-media coverage, implying low interest.  And like usual in June, the numbers of individual investors writing me with comments or questions on gold or gold stocks has withered dramatically compared to April.  But I am getting more consulting inquiries from fund guys.

Talking with other professionals creating gold-sector-research content, they’ve told me they also feel like gold and its miners are languishing in considerable indifference.  Web-page views, video views, and both free and paid subscriptions are down.  When retail investors get excited about gold and gold stocks, these metrics soar.  Gold’s sideways drift is accomplishing its mission of rebalancing sentiment and technicals.

Back in mid-April when gold got crazy-overbought, a 10%+ correction was highly-probable based on historic precedent.  So I changed my near-term gold bias to short, added GLD put options, ratcheted up the trailing stop losses on our many existing gold-stock trades to lock in more of their big unrealized gains, and held off on buying any new positions.  That was prudent then whether gold corrected or not.

Then just this Tuesday in our popular weekly subscription newsletter, I shifted my gold bias back to neutral and started layering into new gold-stock trades again ahead of this upcoming epic record earnings season.  Gold may yet correct, but the odds dwindle with each passing week of drifting sideways which gradually bleeds away mid-April’s excess greed. 

In a nutshell speculators’ gold-futures long positioning is really low for a late-stage mighty cyclical gold bull, American stock investors have only started shifting capital into major gold ETFs, and both central-bank and Chinese gold demand remain robust by all accounts.  And gold is heading into its usually-strong autumn-rally season, increasing the chances its pulling-back monster upleg will soon resume.

That would make for a potent mix heading into gold miners’ best earnings season ever by far.  If gold resumes rallying on balance even modestly, gold-stock psychology will rapidly improve fueling big buying along with those epic Q2 results.  The gold stocks should really outperform in that scenario, and they still have massive catch-up rallying to do to reflect gold.  From early October 2023 to mid-June, it soared 88.6%.

If the major gold miners of GDX leveraged that by their usual 2x to 3x, its own parallel bull run would have 177% to 266% gains!  Yet during that same mighty-cyclical-gold-bull span, GDX has only rallied 110.2%.  That makes for dismal 1.2x upside leverage, way too low to compensate for gold miners’ big additional operational, geological, and geopolitical risks heaped on top of gold price trends.  Gold stocks are way behind.

Today’s huge gold upleg is its first monster-status one achieving 40%+ gains since mid-2020.  During that, GDX skyrocketed 134.1% for great 3.4x upside leverage to gold!  Much of gold stocks’ gains come later in major gold uplegs, when retail investors start getting excited and chasing them.  So it’s not unusual to see underperformance early on followed by big outperformance later as gold stocks way surpass their metal.

If gold instead remains trapped in its high consolidation through this coming Q2 earnings season, the gold miners won’t soar.  But they ought to continue grinding higher on balance outpacing gold, like we saw in June.  Gold’s high consolidation has meandered in a range from roughly $3,425 upper resistance down to $3,175 lower support.  If gold merely stays high, the gold miners will continue to earn huge record profits.

Though its chances are waning, gold could also still roll over into a 10%+ correction-grade selloff.  In that scenario, the gold stocks would likely resume amplifying their metal’s downside by 2x to 3x.  That no longer looks like a high-probability scenario after gold’s long greed-bleeding drift since mid-April, but could still happen.  The biggest risk is the US dollar surging out of extreme oversoldness triggering gold-futures shorting.

But with gold miners stacking records, gold stocks’ most-likely coming scenario is ongoing gains to more major secular highs.  We’ll adjust our ongoing trading strategy to market conditions in our subscription newsletters each week.  That means adding more great fundamentally-superior mid-tier and junior gold-stock trades when appropriate, and holding off when not.  Join us and get deployed before Q2’s record earnings!

The bottom line is gold miners are continuing to stack records.  They will soon report their best quarter ever by far, their fifth in a row achieving fat windfall profits.  This sector is printing money at these record prevailing gold prices, achieving fantastic fundamental strength.  That has left current gold-stock price levels seriously undervalued relative to underlying corporate earnings, a valuation anomaly that can’t last.

While retail investors are apathetic without gold surging, professional investors have been increasingly buying gold stocks.  That has driven outsized GDX gains during gold’s recent high consolidation, which is quite unusual.  The potent combination of gold likely resuming grinding higher in its autumn rally and gold miners’ epic record Q2 results ought to accelerate gold-stocks gains.  They still have big catch-up rallying to do.

Adam Hamilton, CPA

June 27, 2025
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