Gold Miners Shine in 2025

Key Takeaways

• Gold miners are showing substantial strength, with the NYSE Arca Gold Miners Index (GDMNTR) up over 50% year-to-date, outpacing gold’s 25.35% gain.
• Wall Street is behind the curve, still using conservative gold and silver price assumptions, creating room for potentially major earnings upgrades.
• Precious metals ETFs are seeing strong inflows, but mining equities remain relatively under-owned, presenting a contrarian buying opportunity.
• Precious metals mining stocks remain undervalued, even after significant gains, suggesting the bull market in precious metals equities has more room to run.

Performance as of July 31, 2025

Source: Bloomberg and Sprott Asset Management LP. Data as of July 31, 2025.
* BPS stands for basis points.  **ETF holdings are measured by Bloomberg Indices; the ETFGTOTL is the Bloomberg Total Known ETF Holdings of Gold Index; the ETSITOTL is the Bloomberg Total Known ETF Holdings of Silver Index.

July: A Volatile Month for Gold and Silver

July saw gold and silver whipsawed by shifting economic data, heightened geopolitical tensions and uncertainty over the Federal Reserve's ability to remain independent on interest rates. Gold reached an all-time high of $3,431.48 on July 22, and silver reached $39.40, its highest level since 2011. However, in the final days of July, both metals sold off following hawkish signals from the Fed that it was not likely to lower interest rates at its July 29-30 Federal Open Market Committee (FOMC) meeting despite heavy pressure from the Trump administration. At the meeting, the Fed left interest rates unchanged for the fifth straight time. 

Despite July’s turbulence, gold and silver remain in a powerful bull market—both up over 25% year-to-date.

Despite July's volatility and consolidation, the first seven months of 2025 marked a continuation of the bull market in the precious metals sector, with gold and silver both posting strong gains. Gold ended the month at $3,289.03 per ounce, an increase of $665.43 or 25.35% year-to-date. Silver climbed $7.81 per ounce in the first seven months, an increase of 27.03%. For the seven months, gold and silver mining equities, as measured by the NYSE Arca Gold Miners Index (GDMNTR), returned 52.65%, demonstrating how effective miners can be in providing performance torque to their underlying metals. Silver mining equities also benefited from accelerating industrial demand in solar, EVs and electronics. 

The precious metals rally reflects not only a flight to traditional safe havens, but also growing concerns about persistent inflation, currency debasement and central banks approaching the limits of policy normalization amid burgeoning levels of debt both domestically and globally. With real interest rates stabilizing and fiat currency credibility under pressure, we believe investor appetite for hard assets has further room to grow. We remain bullish⁷ on gold and silver as fundamentals continue to strengthen, and even more bullish on precious metals equities. The strength and duration of the precious metals are worth noting, and in Figure 1, we show the long-term strength of gold and silver versus broader equities, bonds and the U.S. dollar.

Figure 1. Gold and Silver, vs. Stocks, Bonds and USD (12/31/1999-7/31/2025) 

Source: Bloomberg. Period from 12/31/1999-7/31/2025. Silver is measured by the SILV Comdty Spot Price; S&P 500 TR is measured by the SPX; US Agg Bond Index is measured by the Bloomberg Barclays US Agg Total Return Value Unhedged USD (LBUSTRUU Index); and the U.S. Dollar is measured by DXY Curncy. Past performance is no guarantee of future results. 

Wall Street Continues to Underestimate Gold and Silver

Wall Street continues to underprice gold and silver, leaving room for earnings surprises in 2025.

Despite the ongoing strength in precious metals, most analysts on the sell side have maintained conservative gold and silver price assumptions in their equity models, creating a meaningful gap between current market realities and consensus earnings expectations for mining companies. We believe this disconnect sets the stage for a powerful wave of upward earnings revisions throughout the remainder of 2025 as analysts revise forecasts to reflect the new pricing regime.

As we’ve highlighted previously, Wall Street continues to model lower gold and silver prices compared to the spot market. The table in Figure 2 illustrates the difference between consensus gold and silver prices forecasts against the forward curve as of June 30, 2025.

Figure 2. Consensus Forecasts for Gold and Silver Prices to 2028

Source: Bloomberg. Data as of 6/30/2025.

This resulting discrepancy between realized and forecast prices has created an interesting backdrop for precious metals equities. Earnings projections are based on forecast metals prices; however, as noted earlier, we have seen the price of gold and silver rally. The difference typically flows to the earnings line after accounting for taxes and royalties.

The resulting scramble to update earnings and free cash flow expectations has led to massive revisions to the upside for virtually every producer we track. The large-cap precious metals index, the NYSE Arca Gold Miners Index (GDMNTR), has seen its earnings estimate rise by a truly astounding ~80% through 2025 (see Figure 3). We posit that a further increase in earnings is possible if the bullish underpinnings for gold and silver continue.

Figure 3. Precious Metals Miners Have Seen Their Earnings Estimate Surge (2022 to 2025)

Source: Bloomberg. Precious metals miners are measured by the NYSE Arca Gold Miners Index (GDM). Data as of July 29, 2025.

Even if precious metals consolidate around current levels after a strong run, equity valuations appear shockingly undervalued (as shown in Figure 4). There has historically been a strong correlation between the price of gold and gold mining stocks, although they are not always in sync.

If we enter an environment of weaker economic growth and continued headwinds from global trade disruptions, there is a case for even higher precious metals and miners prices in the second half of 2025. This would likely result from central banks leaning dovish in an environment where inflation remains sticky. A potentially stagflationary backdrop could catalyze a stronger move toward gold by both investors and central banks.

Figure 4. Gold Equities Currently Lag Gold Bullion (2000-2025)

Source: Bloomberg. Data as of 06/30/2025. Gold is measured by the GOLDS Comdty Index and gold equities by the NYSE Arca Gold Miners Index (GDM). You cannot invest directly in an index. 

An Attractive Opportunity for Investors

Perhaps the most perplexing development has been the lack of investor flows into precious metals equities. Since the beginning of 2025, the VanEck Gold Miners ETF (GDX) has seen a decline of over 20% in outstanding units, while its cousin, VanEck Junior Gold Miners ETF (GDXJ), which is focused on smaller-cap miners, has lost nearly 22% of its outstanding units.

Figure 5. Shares Outstanding for GDX and GDXJ Continue to Decline Despite Stronger Fundamentals

Source: Bloomberg. Data as of July 29, 2025.

While puzzling today, this mirrors the earlier behavior seen in gold and silver bullion ETFs prior to 2025, where outflows persisted even as prices rose. The opportunity presented to astute equity investors is compelling: the ability to acquire companies experiencing strong earnings growth, trading at depressed valuations. Despite this strong start to 2025, we believe the precious metals bull market appears to still be in its early innings. We believe that gold mining equities are in the bargain bin and we unabashedly continue to pound the table for precious metals equities and bullion alike.

Footnotes