Imaru Casanova, Portfolio Manager, Gold and Precious Metals, VanEck
Gold Stabilizes Near $3,300; Mining Companies Soar on Strong Earnings, Discipline, and Expanding Margins, Suggesting Potential Re-Rating and New Potential Upswing for Gold Stocks.
Monthly insights into the gold market and economy, presented by Portfolio Manager Imaru Casanova, with her unique perspectives on mining and gold’s strategic portfolio benefits.
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Key Takeaways:
- Gold is moving in a narrow range near $3,300 per ounce, with factors such as Fed turmoil and global risks fueling safe-haven demand
- Gold mining stocks rose in August on strong earnings and capital discipline
- Signs of a sector re-rating suggest gold stocks may be entering a new bull cycle
Political Turmoil, Golden Calm
Gold continues to be supported by the elevated uncertainty and volatility stemming from ongoing global geopolitical and trade tensions and mixed economic signals. In August, gold itself was caught up in the trade tariff chaos when news reports suggested that the U.S. had imposed tariffs on 1-kilogram and 100-ounce bars of gold.1 The White House and President Trump later assured markets that gold will not be subject to tariffs.2 TACO, indeed! The gold tariff fiasco is an example of the confusing political environment in the U.S., where markets are trying to rapidly reinterpret and price in fast-moving (and contradictory) information on a daily basis.
Gold Holds Steady
Gold prices have been range-bound around $3,300 per ounce since its strong rally following its “Liberation Day” in April.3 This sideways action does not surprise us. In recent years, gold prices have tended to consolidate around a new, higher base after significant moves to new highs, before the next catalyst emerges to propel it to the next level. While there are many potential catalysts at present, the timing is impossible to predict. Anything that threatens the stability of the global financial system could trigger a surge in safe-haven demand for gold.
From Tariff Negotiations to Rally
We got a taste of what some of these catalysts might look like on
August 20, when President Trump called for the resignation of Lisa Cook, a governor of the U.S. Federal Reserve (“Fed”) – and announced days later that he had dismissed her.4 This escalation of attacks on the Fed by the current administration has raised fears that the Fed could lose its independence, threatening the stability and credibility of the world’s most important central bank. Gold rallied in response, supported by the increased probability of a Fed rate cut in September and a weaker dollar, closing at $3,447.95 per ounce on August 29, a monthly gain of $158.02 (4.80%).5
As of August 31, gold was up 78% over the past five years (August 31, 2020 to August 31, 2025). Investors should remember that past performance is not a reliable indicator of future results and that an investment in gold is subject to risks, including volatility and the risk of investing in natural resources, as well as the potential loss of capital. Investments are subject to risks, which may include the possible loss of the capital invested. The returns of this investment may increase or decrease due to currency fluctuations between the dollar and the euro.
Quiet Metal, Hot Mining Companies
The NYSE Arca Gold Miners Index (GDMNTR) (“GDM”) rose a whopping 21.73%6 over the course of the month, while the mid- and small-cap index, the MVIS Global Junior Gold Miners (MVGDXJTR), gained 23.35%.7 As expected, the rise in the price of gold led to an increased rise in gold stocks, reflecting their leverage on the metal price. However, the significant outperformance suggests that factors other than the price of gold supported gold mining stocks in August. We believe that a major driver was a very strong Q2 2025 earnings season: Companies generally reported financial and operating results that met or exceeded expectations, with many companies reporting record revenues and record free cash flow. Most companies maintained their annual forecasts, and many larger players reaffirmed their commitment to higher shareholder returns through dividend payments and share buybacks. Investors seemed reassured that higher gold prices are indeed translating into higher margins, higher profitability, lower debt and better growth prospects for the industry. And while August was not a bad month for the broader stock market, supported by the dominance of mega-techs and optimistic rate cut speculation, the monthly rise of the S&P 500® Index of about 2%8 paled in comparison to the rise of gold mining stocks. Highly valued U.S. stocks, concerns that growth of mega-cap stocks may be slowing, and the high concentration on AI/technology stocks may also be leading to portfolio diversification and capital rotation that benefits gold stocks.
Mining Companies are Getting Their Mojo Back
Could it be that gold stocks are finally getting their mojo back after nearly two decades of sustained devaluation? Our data seems to suggest that this may be the case. We have been tracking the relationship between gold bullion and gold stocks (GDM) since 2001 (see chart below) and have identified six clear (strong) trends that indicate a significant and sustained devaluation of the gold mining sector since 2007. A downgrade occurs when a trend line shifts to the right and/or down. The downgrades in the past were the result of companies repeatedly disappointing their investors. Now, investors are seeing growing margins, low debt, discipline in capital allocation, and companies doing what they announced for this year. While it is too early to say whether a new valuation trend is emerging, the August data is encouraging and could signal the beginning of a new bull cycle for gold mining stocks. For comparison, the bull market trend from 2001-2007 would imply a GDM value of approximately 6,000 at today’s spot gold price, compared to the current value of approximately 1,800. A return
to these historical industry multiples may seem unrealistic and is not part of our outlook, but a significant re-rating of the sector is, in our view, in sight. Investors must remember that past performance is not an indicator of future results.
As mentioned above, the chart below shows the performance of the gold price compared to the GDM since 2001 and highlights the six trends – as well as a possible re-rating with a steeper “new trend” that has been emerging since mid-August 2025.
Gold vs. NYSE Arca Gold Miners Index
Weekly Close from 2001 to 2025
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1 Reuters. (07.08.2025)
2 Reuters. (11.08.2025)
3 World Gold Council. (31.08.2025)
4 Reuters, Yahoo Finance. (20.08.2025)
5 World Gold Council. (31.08.2025)
6 FT. (30.08.2025)
7 MarketVector. (31.08.2025)
8 FT. (30.08.2025)
Sources for other data/information, unless otherwise noted: Bloomberg and company analyses, August 2025.
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