Gold mining stocks have delivered a stellar rally with some companies seeing gains nearing 200% year-to-date, yet a leading macro strategist believes the sector remains significantly undervalued and is poised for historic profit margins.
Gold Miners’ Valuation Shrinks Despite Stellar Rally
Otavio Costa, Macro Strategist at Crescat Capital, highlighted in a recent X post that despite the impressive surge in share prices, the sector’s Price-to-Earnings (P/E) ratios have actually “contracted — a sign that mining stocks are growing faster than share prices.
Costa's analysis, backed by a compelling chart comparing the Philadelphia Stock Exchange Gold and Silver Index's earnings per share (EPS) against its price, illustrates a dramatic divergence.
Gold Miners Set To Post ‘Highest Profit Margins’ In History
While prices have climbed steadily, EPS has soared, leading to a situation where the sector’s valuations appear remarkably cheap relative to its burgeoning profitability.
“Earnings per share for the Philadelphia Gold & Silver Index have more than quadrupled over the past five years,” Costa noted.
He concluded with a bold prediction: “If gold prices hold steady or move higher, these companies could post some of the highest profit margins in the industry's history, in my view.”
Gold Shoots To The Moon Nearing $3,900 Per Ounce
This optimistic outlook for gold miners comes amidst a robust surge in gold prices, which are currently nearing the $3,9000 per ounce mark, having risen 45.95% over the last year.
This rally, according to experts, is not merely a reaction to fleeting events like government shutdowns but rather a reflection of deeper economic shifts.
Eugenia Mykuliak, Founder & Executive Director of B2PRIME Group, weighed in on the broader macroeconomic landscape. “At $3,900 per ounce, gold's surge has little to do with the shutdown itself. Instead, it reflects deeper anxieties about the Federal Reserve's ability to navigate its monetary policy dilemma,” Mykuliak explained.
Gold Driven By Macro Concerns?
Mykuliak emphasized that “the economic narrative is being shaped by structural forces — monetary uncertainty, fiscal strain, and global risk appetite.”
These underlying factors suggest that gold’s ascent is driven by sustained macro concerns rather than transient headlines, providing a solid foundation for continued strength in the precious metal.
This sustained high gold price environment is precisely what fuels Costa’s projection for unprecedented profit margins among gold miners, making their current “undervalued” status particularly noteworthy for investors.
The combination of strong earnings growth, attractive valuations, and a supportive macroeconomic backdrop paints a compelling picture for the future of gold mining stocks.
Price Action
Here’s a list of a few gold miners and gold miner tracking exchange-traded funds that investors could consider.
| Stocks | YTD Performance | One Year Performance |
| Harmony Gold Mining Company Ltd. (NYSE:HMY) | 117.45% | 74.29% |
| Perpetua Resources Corp. (NASDAQ:PPTA) | 87.06% | 125.66% |
| Eldorado Gold Corp. (NYSE:EGO) | 87.70% | 67.04% |
| Sandstorm Gold Ltd. (NYSE:SAND) | 118.56% | 106.97% |
| Iamgold Corp. (NYSE:IAG) | 133.87% | 145.30% |
| Skeena Resources Ltd. (NYSE:SKE) | 96.16% | 114.22% |
| Kinross Gold Corp. (NYSE:KGC) | 157.59% | 160.49% |
| Newmont Corporation (NYSE:NEM) | 124.00% | 59.17% |
| Royal Gold Inc. (NASDAQ:RGLD) | 48.72% | 40.99% |
| Anglogold Ashanti PLC (NYSE:AU) | 194.45% | 165.94% |
| Gold Miner ETFs | YTD Performance |
| VanEck Gold Miners ETF (NYSE:GDX) | 118.25% |
| VanEck Junior Gold Miners ETF (NYSE:GDXJ) | 122.84% |
Gold Spot US Dollar rose 0.52% to hover around $3,885.93 per ounce. Its last record high stood at $3,895.33 per ounce. The prices have risen 23.79% over the last six months and 45.95% over the last year.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Thursday. The SPY was up 0.28% at $670.29, while the QQQ advanced 0.57% to $606.66, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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