More Gold-Miner Records

Gold stocks are soaring with their metal, stacking more record closes.  But rallying so far so fast has left this sector exceedingly-overbought, at serious risk of a big-and-fast selloff.  While periodic rebalancings are inevitable and healthy in powerful bull markets, gold miners’ fundamentals still support much-higher prices.  Gold miners’ Q3 earnings season will soon get underway, with spectacular record-shattering results.

Gold miners mostly report their latest quarterly operational and financial results from four-to-six weeks after quarter-ends.  Earnings season is like Christmas for gold-miner analysts, speculators, and investors!  During these four times per year, we finally get to see how gold miners are actually faring fundamentally.  That dispels the fogs of herd sentiment usually shrouding this sector, offering valuable crystal-clear insights.

I’ve been intensely studying and actively trading gold stocks for over a quarter-century, and writing popular financial newsletters about it.  Earnings seasons are my favorite times to be deeply immersed in the markets.  For 37 quarters in a row now, I’ve analyzed the latest results reported by the 25 largest GDX gold-stock-ETF component stocks then written essays explaining them.  I’m sure excited for the next one.

Through all that painstaking research work, I’ve built a massive spreadsheet detailing major gold miners’ key operating and financial statistics every quarter.  That dataset grows more valuable the larger it becomes, yielding new insights.  One metric has gradually risen to the top as the single-most-useful measure for gold miners’ performance as a sector, distilling out much accounting noise.  It is average implied unit earnings.

Computing these each quarter simply involves subtracting the GDX top 25’s average all-in sustaining costs per ounce from the quarterly-average gold price.  The latter is trivial to calculate, while the former is much-more-involved.  During the just-completed Q3’25, gold averaged a stupendous $3,459 per ounce!  That is an all-time-record high of course, shattering the previous record of $3,285 in the preceding Q2’25.

Last quarter average gold prices skyrocketed a huge 39.7% year-over-year!  Because of gold miners’ big inherent profits leverage, the great majority of higher gold prices directly translate into higher earnings.  While gold can climb rapidly, gold-mining costs are way more static.  They are largely fixed during mine-planning stages, when engineers decide which ores to mine and how to process them to recover their gold.

No matter how high gold surges, individual mines require similar levels of infrastructure, equipment, and employees to keep operating every quarter.  Their designed throughputs don’t change except in rare expansions, processing essentially the same tonnages of ores quarter after quarter.  So though mining costs do gradually rise because of inflation, they lag way behind gold price increases during major bull markets.

While the quarterly-average gold price is known with certainty when quarters end, gold miners’ average all-in sustaining costs aren’t until after miners all report their full quarterly results.  For this just-finished Q3, that means mid-November.  Soon after that I’ll analyze the GDX top 25’s Q3 results in depth and write a new essay explaining how miners fared.  For now, we can estimate average AISCs which is fairly-complex.

Over the past four reported quarters ending in Q2’25, the GDX top 25 averaged AISCs of $1,431, $1,454, $1,396, and $1,424 per ounce.  Average those in turn, and major gold miners’ AISCs ran $1,426 over this past year.  Based on that, $1,425 is a reasonable estimate for Q3’25.  But complicating things, many of the GDX top 25 give full-year guidances for AISCs.  Those averaged $1,537 for all of 2025 as reported in Q2 results.

Guidances are averages of midpoints, as all miners forecasting AISCs give them in ranges.  But using 2025 guidance for a Q3 estimate is problematic.  Q1 and Q2 averaged $1,410 AISCs among the GDX top 25.  So if the midpoint guidance is accurate which is never the case, Q3 and Q4 would have to average a lofty $1,664!  But that contradicts many gold miners predicting higher outputs and thus lower mining costs in Q3 and Q4.

That was mainly from new expansions and new mine-builds, yet also some better ore grades.  With fixed maximum tonnages run through mills every quarter, higher ore grades directly translate into more ounces produced.  That spreads mining expenses across more gold, lowering unit costs.  Rather interestingly, global gold mining as a whole also exhibits a fascinating quarterly pattern of production shifts very relevant today.

Every quarter the World Gold Council publishes the best-available global gold supply-and-demand data in its fantastic Gold Demand Trends reports.  They are very-well-written required reading for anyone trading gold or gold stocks!  The latest iteration covered Q2’25, but as always included extensive quarterly history of gold fundamentals stretching back to Q1’10.  Crunching the world gold-mined-supply numbers is illuminating.

On average quarter-on-quarter, world gold production falls 4.5% in Q1s, climbs 2.1% in Q2s, surges 5.4% in Q3s, then retreats 0.7% in Q4s.  Third quarters see the biggest quarterly production jumps of the year, trouncing everything else!  If that happens again in this just-finished Q3’25 which is highly-likely, gold-mining costs are likely to fall proportionally from Q2’25 levels.  And again those ran $1,424 for the GDX top 25.

Why do these quarterly global-gold-output fluctuations happen?  Over 2/3rds of the world’s land masses and most of the world’s gold mines are in the northern hemisphere.  Q1s are the weakest gold-production quarters of the year due to winters.  Cold and/or wet weather retards gold-mining operations on multiple fronts.  Up north colder temperatures reduce the efficiencies of heap-leach chemical reactions to recover gold.

Down south heavy rains dilute leaching solutions slowing recoveries, and sometimes slow truck access to mining pits.  Mine managers take advantage of the slower winters to do necessary plant maintenance, sometimes taking them offline.  That allows mines to run full-tilt for the rest of the year.  Q3s in turn are the warmest quarters in summer with the fewest obstacles to recovering gold.  So global output surges in Q3s.

If GDX-top-25 production again climbs 5%ish from Q2 levels, that implies proportionally-lower mining costs than Q2’s.  That would be way down near $1,352!  I’m certainly not that optimistic, but the range of potential major gold miners’ Q3’25 AISCs is roughly $1,350 to $1,650.  My best guess is they shake out between $1,425 to $1,450 in this just-finished quarter.  But to be conservative, let’s just use the midpoint at $1,500.

Gold absolutely averaged that stupendous all-time-record $3,459 in Q3.  If the GDX-top-25 gold miners average higher AISCs of $1,500 which would be up 5.4% QoQ and 4.8% YoY, that yields implied unit earnings of $1,959 per ounce!  That’s another new all-time-record high, shattering Q2’25’s previous record of $1,861.  And $1,959 would skyrocket a spectacular 87% YoY from Q3’24’s GDX-top-25 levels of $1,046!

More gold-miner records are a certainty in their upcoming Q3’25 results.  They will extend way beyond implied unit earnings to record revenues, record operating cash flows, record bottom-line accounting profits, and more.  Without any doubt, Q3 is going to prove gold miners’ best quarter ever achieved by far.  Such incredibly-strong fundamentals will add to gold miners’ allure among institutional investors running funds.

All this is awesome, but the truly-amazing thing is this is nothing new.  During the last eight reported quarters ending in Q2’25, the GDX top 25’s average implied unit earnings soared 87%, 47%, 31%, 75%, 74%, 78%, 90%, and 78% YoY!  If Q3 indeed runs +87%, that’s just another brick in the skyrocketing-gold-miners-earnings wall.  No other sector in all the stock markets comes close to gold miners’ soaring profits.

Such epic fundamentals certainly justify much-higher gold-stock prices.  This chart shows GDX over the past several years or so, encompassing its bull market fueled by gold’s.  Gold stocks have just soared to extremely-overbought levels, they are super-overheated.  So a big-and-fast selloff is highly-probable soon to rebalance way-overextended technicals and sentiment.  But gold-stock prices should ultimately go way higher.

After a quarterly-century actively trading gold stocks, this chart makes me really nervous.  GDX has soared a frightening 57% above its 200-day moving average this week!  In the entire history of this leading gold-stock benchmark since its 200dma was first established in early-March 2007, GDX has closed 57%+ over on just 11 trading days or 0.2% of all of them!  We are in dangerous wildly-rarefied territory here.

Fully 8 of those exceedingly-overbought days came in July 2016.  That episode didn’t end well for gold stocks, with GDX plunging 39.4% over the next 4.4 months into mid-December on a parallel 17.2% gold selloff!  The major gold stocks of GDX tend to amplify material gold moves by 2x to 3x.  And gold itself is crazy-overbought today, arguing it faces a big-and-fast 10%+ correction-grade selloff in coming months.

Such extreme technicals are overwhelmingly short-term-bearish for gold stocks, there’s no doubt.  But once they suffer a rebalancing selloff, they can resume powering much higher.  Since early October 2023 when gold’s mighty bull started galloping, GDX has soared 205.5%.  But if that Q3’25 implied-unit-earnings estimate of $1,959 is in the ballpark, GDX-top-25 sector profits have soared 188.2% in that span!

So gold stocks have merely paced their profits growth, largely maintaining similar low valuations to what they suffered back in Q4’23 when GDX averaged just $29.26!  Even in conventional trailing-twelve-month price-to-earnings-ratio terms, plenty of gold miners are still trading in the teens or even single-digits!  Gold stocks are far from overvalued, and mounting investor enthusiasm drives huge overvaluation late in bulls.

Considered another way, gold’s huge bull run which is also a single monster upleg yet to see any 10%+ corrections has soared 122.1% at best since early October 2023.  GDX leveraging that by its historical norm of 2x to 3x would make for a 244%-to-366% gold-stock bull so far.  Yet again GDX has merely climbed 205% at best in these last couple years.  Gold stocks remain well behind gold with lots of rallying left to do.

Overboughtness is normal in bulls, which take two steps forward before one step back.  And gold-stock technicals mirror and amplify gold’s, meaning GDX suffers periodic selloffs with its metal.  So pullbacks and corrections are par for the course in bulls, perfectly normal and healthy.  Just because gold and its miners’ stocks are due for another rebalancing selloff now certainly doesn’t mean their bull runs are over.

Far from being threats, periodic mid-bull selloffs are great opportunities for speculators and investors.  Their resulting lower prices offer the best mid-bull entry points for adding new positions.  While our newsletter trading books are currently full of huge unrealized gains running as high as +106% on young gold-stock trades we added from late June to late July, I’m looking forward to buying more after this next selloff.

Ideally it would unfold rapidly before Q3 earnings season hits full-swing in early November, but no one can know the timing and depth in advance.  With fund managers getting interested in gold and gold stocks for the first time in many years, the miners’ epic record Q3 results could spark sizable-to-big buying.  But if this overdue selloff tarries and hits during earnings releases, their psychological impact would be muted.

Regardless if gold stocks keep surging or instead plunge sharply from here, the gold miners’ fundamentals continue to improve.  They’ve been incredibly strong for eight quarters in a row now, and Q3’25 will prove the ninth.  And actively trading gold stocks has been very profitable for far longer than that.  Since 2001 our pair of subscription newsletters have realized 1,601 total stock trades as of Q3’25, mostly gold miners.

Their average annualized realized gains across that quarter-century span, including all bears and all losing trades, is running +18.2%!  Professional money managers know that is a tremendous world-class track record, roughly doubling stock markets’ long-term average!  Our average is going to climb after we realize massive gains on about 20 more open gold-stock trades still on our books.  The getting is really good.

Successful trading demands always staying informed on markets, to understand opportunities as they arise.  We can help!  For decades we’ve published popular weekly and monthly newsletters focused on contrarian speculation and investment.  They draw on my vast experience, knowledge, wisdom, and ongoing research to explain what’s going on in the markets, why, and how to trade them with specific stocks.

Our holistic integrated contrarian approach has proven very successful, and you can reap the benefits for only $10 an issue.  We extensively research gold and silver miners to find cheap fundamentally-superior mid-tiers and juniors with outsized upside potential.  Sign up for free e-mail notifications when we publish new content.  Even better, subscribe today to our acclaimed newsletters and start growing smarter and richer!

The bottom line is more gold-miner records are coming in Q3’s results.  Dazzling record average gold prices last quarter combined with far-slower-rising mining costs are going to yield fantastic record implied unit earnings for gold miners.  Those are likely to almost double year-over-year, making for the ninth quarter in a row of colossal market-leading earnings growth.  Fund investors should again take notice of this.

But gold miners’ strongest fundamentals ever are clashing with exceedingly-overbought prices today.  Their own history argues they’ve rallied too far too fast to be sustainable, meaning big-and-fast selloffs are overdue.  But after those rebalance super-stretched technicals and sentiment, gold miners’ epic fundamentals still support much-higher price levels in coming years.  Q3’s earnings season will prove phenomenal.

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