Gold miners are looking cheap here with the commodity at all-time highs
Key Take-aways from “Gold miners are looking cheap here with the commodity at all-time highs” (CNBC, Apr 23 2025)
| Table 1 – Macro & Valuation Snapshot | |
| Spot gold (futures) record | US $ 3,509.90 / oz (Apr 22 2025) |
| Gold’s YTD move (2025) | ▲ ~48 % |
| VanEck Gold Miners ETF (GDX) | ▲ 48 % YTD • 9 % M-to-date |
| GDX forward P/E | 13.9× (vs. 19.1× for S&P 500 Materials) |
| Newmont forward P/E | 13.3× (10-yr avg 20.7×) |
| Typical dividend yield | Newmont 1.8 %; many peers 1–2 % |
| Table 2 – Technicians’ & Managers’ Preferred Names | Reason for Pick |
| Agnico Eagle Mines (AEM) | Already above its 2011 peak → “structural strength” |
| Franco-Nevada (FNV) | Ditto; royalty model cushions cost risk |
| Royal Gold (RGLD) | Royalty/streaming margin leverage; 37 % YTD |
| Wheaton Precious Metals (WPM) | Similar royalty profile; 48 % YTD |
| Northern Star Resources (NST-AU) | Buy-backs + mine expansion + dividend income |
| B2Gold (BTG) & Coeur Mining (CDE) | Technical breakout catching up to bullion |
| ETF route | GDX for diversified miners; GLD / IAU for bullion |
Narrative Highlights
- Miners finally outperforming bullion: After ~15 years of lagging, the ratio of miners : gold has started to turn up, suggesting a multi-year relative trend change.
- Breakout confirmation: GDX just cleared a multi-year base; technicians see room to retest its 2011 high near 64 (—> ~27 % upside from Apr 22 close 50.23).
- Overbought near-term but dips likely bid: Both gold and miners trade >20 % above 200-day MAs – expect volatility, yet charts favour buying pullbacks.
- Valuation cushion: Forward P/Es sit at mid-teens—well below historical norms and the wider Materials sector—despite record commodity prices.
- Income angle: Unlike bullion ETFs, many miners pay 1–2 % dividends, enhancing total-return appeal in a low-growth, volatile macro backdrop.
Investment Action Plan
- Over-weight quality gold miners vs. bullion. Allocate incrementally on pullbacks toward rising 50-day MA support.
- Core holdings: Focus on miners already above prior-cycle highs (AEM, FNV, WPM, RGLD) for structural momentum, plus cash-rich producers like NST with clear capital-return policies.
- Diversified sleeve: Use GDX for broad exposure; a move toward 64 is the first intermediate target.
- Risk management: Gold’s record-high status means any macro-relief (tariff roll-backs, stronger USD, rate spikes) could trigger sharp reversals—size positions accordingly and pair with bullion or cash for hedge.
- Review triggers: Re-evaluate stance if gold closes < $3,200 / oz (break of 200-day MA) or if forward P/Es in the group re-rate above 20× without matching earnings upgrades.
CAN WE ACHIEVE THE SAME INVESTMENT RESULTS with ETF?
VanEck Gold Miners ETF (GDX)
$48.73
+$38.73(+387.30%)Max
$49.44+$0.71(+1.46%)Pre-Market
1D5D1M6MYTD1Y5Ymax
Can an ETF give you “stock-pick”-like exposure to gold miners?
Short answer: Yes, you can get very similar directional returns with a miners ETF such as GDX or a more focused smart-beta fund, but an ETF will inevitably smooth out the extremes—both good and bad—that come from holding a handful of the strongest individual names.
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What the broad miners ETFs actually own
| ETF | Strategy & tilt | Typical # holdings | Expense ratio | 2025 YTD (to 23 Apr) | When it works best |
| GDX | Cap-weighted senior producers | ~50 | 0.51 % VanEck Italy | ETFs & Mutual Funds | +48 % (matches rally in article) | You want the sector beta with high liquidity |
| GDXJ | Cap-weighted junior producers | 90-100 | 0.54 % VanEck Italy | ETFs & Mutual Funds | +50 % | You’re seeking higher operational leverage (and risk) |
| GOAU | Rules-based focus on royalty/streaming & high FCF miners (FNV, RGLD, WPM heavy) | ~30 | 0.60 % U.S. Global ETFs | +46 % | You want a built-in quality filter similar to the stock list in the article |
| RING / SGDM | MSCI cap-weighted (RING) / momentum-factor tilt (SGDM) | 30-40 | 0.39 % / 0.50 % | +45–49 % | Lower fee (RING) or quant tilt (SGDM) alternatives |
All performance figures are price-only for quick comparison; total-return ETFs differ slightly.
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How ETF returns stack up against the “best-idea” stocks
2025 YTD through 23 Apr
| Ticker | Name | YTD | Role in GDX |
| AEM | Agnico Eagle | +55 % | ~8 % weight |
| FNV | Franco-Nevada | +47 % | ~7 % |
| RGLD | Royal Gold | +37 % | ~4 % |
| WPM | Wheaton PM | +48 % | ~4 % |
| GDX | ETF | +48 % | Holds all of the above |
Take-away: GDX has kept pace with the standout names so far because the whole group is breaking out. In years when leadership narrows, a single-stock basket could outperform by 5-10 pp, but it can just as easily underperform if one holding stumbles.
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Pros and cons of going the ETF route
| ✔️ Advantages | ⚠️ Trade-offs |
| Diversification – one holding spreads exposure over 30-100 miners → lower single-asset blow-ups | Diluted upside – laggards offset the “champions” (AEM, FNV, etc.) |
| Liquidity & tight spreads – easy to scale, trade options, run stop-losses | Can’t drop losers – index rules keep weak firms until the next rebalance |
| Built-in rebalancing – weights adjust automatically as winners get bigger | Higher fees than owning stocks directly (0.4–0.6 % p.a.) |
| Simpler tax paperwork (one 1099) & margin efficiency | Dividend yield slightly lower than a hand-picked high-yield stock mix |
| No foreign-withholding headaches for Aussie/Canadian shares | Factor drag – cap-weight funds often overweight slower-growth giants |
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Matching (or improving on) the article’s thesis with ETFs
- Directional bet: If your goal is simply to ride a multi-year turn in miners vs. bullion, a core position in GDX already does the job with less headline risk.
- Quality overlay: Pair GDX with GOAU or SGDM (quality / momentum tilts) to overweight the structurally stronger royalty names the technicians highlighted.
- Tactical sleeve: Add GDXJ on pull-backs if you want extra torque from small caps while accepting higher volatility.
- Income emphasis: Even GDX yields ~1.4 %, but if dividend income is a major goal, you’ll still need to cherry-pick or supplement with individual payers like NST-AU or AEM.
Practical implementation checklist
- Sizing: Treat GDX (or a two-ETF combo) as your core—then only add single stocks for “satellite” alpha if you have conviction and time to monitor them.
- Rebalance discipline: Review quarterly; trim if the ETF moves >25 % above its 200-day MA (current gap ≈ 20 %).
- Risk guardrails: Set a hard stop (e.g., gold < $3,200 /oz or GDX < 42) to cap downside.
- Cost hygiene: Keep total fund fees under 0.6 % by avoiding overlapping ETFs.
Bottom line: Yes—using miners ETFs (especially a mix of cap-weighted GDX and a smart-beta “quality” fund) you can capture almost all of the upside the chart analysts expect, with far less single-company risk. You’ll forgo the chance to beat the index by pinpointing winners, but you’ll also protect yourself if one of those “favorites” disappoints. Always match the tool (ETF or stock pick) to your time, skill, and risk tolerance—and remember that none of this is personalized investment advice.Bottom of Form
