The unprecedented level of chaos and uncertainty coming from the Trump administration regarding both tariffs and the geopolitical situation overseas, along with an untenable sovereign debt situation and warnings of a coming stagflationary recession, has the current environment very gold friendly.
With the price of gold setting new record highs week over week, the rush to pile into the gold trade reached a fevered peak on Tuesday at $3500 per ounce.
Following an historic breakout from a massive 13-year cup & handle pattern above major resistance at $2100 in March 2024, gold had become technically long-term extreme overbought heading into this week and was due for a rest.
As the U.S. stock market moved closer to recent lows, along with the dollar, President Trump backing off from threats to fire Federal Reserve Chair Jerome Powell triggered a “Turnaround Tuesday” in the marketplace.
The trade du jour reversed from “Sell America and buy gold” to “Run fast to buy everything America and sell gold” – Stocks, Bonds, and the U.S. Dollar bounced, and gold finally experienced some healthy profit-taking.
In just two days, April Gold reversed $260 to move down 7% before attempting to stabilize above support at $3300 heading into the weekend.
During this current 13-month up-leg, each correction has begun with a sharp move down and has taken progressively less time to consolidate the subsequent downdraft as this powerful secular gold bull market moves forward.
Following the previous correction in Gold Futures, the price went from a $3167 peak on April 2 to a low at $2956 on April 7, then blasted $553 higher in just 10 trading sessions.
Although Gold Futures may have reached an interim peak at $3500 earlier this week, the recent rally has not yet attracted the kind of gold fever associated with the 1980 peak.
At that time, there were numerous reports of unusual action, such as customers forming huge lines to buy gold coins and bars in North America, an event that has not happened before or since.
In fact, Western investors have only recently come back into the gold market after being largely absent for the past three years. Although ETFs have seen significant inflows so far in 2025, gold holdings are still 20% down from their record highs in 2020.
North American and European investors bought about 240 tons of gold in ETFs as of mid-April, according to data from the World Gold Council. That’s more than half the 441 tons they sold in the past three years.
SPDR Gold Shares (GLD), the world’s largest gold-backed ETF, has seen $8.65 billion of net inflows as of Monday, with the majority of the inflows coming from institutional investors increasing allocations to gold as an equity-overlay hedge, economic-portfolio hedge and forex and rates hedge, according to Aakash Doshi, global head of gold strategy at State Street Global Advisors.
So far this year, global gold-backed ETFs have seen inflows worth $21.1 billion. But despite the recent blistering gold rally, retail investors are still underexposed to the precious metals mining sector that has massively outperformed stocks, bonds, and the U.S. dollar in 2025.
Just as Western investors are beginning to gain more exposure to the gold space via ETFs, gold mining stocks remain incredibly under-owned relative to the market.
This chart shows the ratio between the GDX and the S&P 500. Relative to the S&P, gold stocks have only recently begun to outperform general equities after being mired in a range-bound pattern for the past ten years.
Additionally, this U.S. Global Investors chart shows gold-backed ETF assets currently representing less than 2% of all ETF assets, down from approximately 8% in 2011. Investment in gold ETFs have significantly picked up since February, but holdings are still off by about 19% from their highs in October 2020.
After both GDX and GDXJ opened over 5% lower Wednesday morning, the weakness was immediately bought heading into the beginning of an expectedly robust Q1 earnings season.
Following a recent a 4.5-year cup & handle breakout above major multi-year resistance at $43 in GDX and $54 in GDXJ, the technical targets are $60 and $85, respectively.
Gold mining sector bellwether Newmont Corporation (NEM) kicked off Q1 earnings season, after Wednesday’s market close, by reporting a strong operational and financial performance that beat Wall Street’s expectations, highlighted by record free cash flow and the completion of its divestment program.
Newmont reported adjusted EBITDA of $2.6B and adjusted net income of $1.25 per diluted share. The divestments completed this year helped strengthen the balance sheet, with $4.7B in cash reported at quarter-end.
During the conference call, management reiterated its 2025 guidance of 5.6 million ounces of gold production with 52% weighted towards the second half of the year.
Newmont CEO Tom Palmer stated that the production outlook for 2025 remains steady, supported by operational improvements and a focus on achieving planned milestones.
NEM has formed a bullish 2.5-year inverse Head & Shoulders accumulative bottom, as blow-out Q1 results has the stock set to break out above the neckline at $55.
The stock of the world’s largest and most liquid gold miner is on the verge of an epic rally from this large accumulative base, that could eventually bring the price back to the 2022 all-time high near $78 before year-end.
With Newmont also being the only gold stock in the S&P 500, the recent rise in volume indicates more generalist capital coming into the relatively tiny precious metals mining space.
On Thursday, after the market close, the best gold miner on the planet, Agnico Eagle Mines Limited (AEM), reported a profit of $814.7 million on revenue of nearly $2.5 billion.
Total net income amounted to $1.62 per share, which was above consensus estimates. Gold production was 873,794 ounces at an all-in sustaining cost (AISC) per ounce of an industry low $1183.
Agnico Eagle's disciplined approach to M&A and exploration success has led to consistent reserve growth and far superior per share growth to peers, while the stock continues to post all-time highs with the gold price.
Meanwhile, as the gold price continues to benefit from rising geopolitical tensions and fears over new U.S. tariffs, silver has stabilized above $33 after initially being hit hard with the stock market.
The Gold/Silver Ratio (GSR) dipped below 100 this week, after peaking at 107 at the beginning of Q2. The only other time this closely followed barometer moved above triple digits was during the Covid-19 panic in March 2020, when the GSR spiked to an unprecedented 124. The historical average for the ratio is around 60 to 1.
The move proved to be an incredible buying opportunity in both silver and the still under-owned junior space, which saw the GDXJ move up nearly 350% in just 5-months from a spike low at $18 as the GSR mean-reverting lower in favor of silver.
With gold stocks breaking out of a huge accumulative 4-year base, the beaten down and left for dead in 2024 mining sector is in the process of a 2025 mean reversion, with many quality juniors beginning to outperform the miners.
At Junior Miner Junky (JMJ), my over two decades of experience in the mining space has the JMJ real-money portfolio up over 50% in 2025. After loading this highly leveraged junior portfolio with 20 quality small-cap gold, copper, and silver related stocks, several are breaking out to multi-year highs with the sector, with others just beginning to catch up.
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