Bank of America sees nearly $1 trillion market cap potential for gold miners

NEW YORK (September 15) The gold market has seen an impressive run so far this year, with prices finding new support above $3,600 an ounce, and one bank has noted that investor interest in gold still has plenty of room to grow.

Not only has gold been one of the best-performing assets this year - rallying nearly 40% - but there is also growing optimism that the market is embarking on a long-term bullish cycle. The entire precious metals sector, including mining equities, is now starting to see broad-based gains.

For many analysts, the missing piece in gold’s rally had been disappointing price action in the mining sector, as record margins and free cash flow had done little to attract new capital. However, sentiment is starting to change as the VanEck Gold Miners ETF (NYSE: GDX) recently hit record highs, surpassing its previous all-time peak set 14 years ago.

While momentum in the mining sector is building, analysts at Bank of America said that demand is still below previous peaks when compared to global equity holdings.

In a note published last week, the analysts said growing investor interest has pushed the total market capitalization of the global gold sector to just over $550 billion.

“This is more than 3x the recent 2022 cycle low of $170bn and more than 8x the 2016 cycle low of $70bn. Remarkably, total global gold sector market capitalization is now nearly 2x the 2020 and 2011 cyclical peaks of $331bn and $334bn, respectively,” the analysts said.

However, BofA also noted that compared to global equities, the mining sector represents about 0.39% of total global market capitalization—roughly in line with levels seen five years ago, but well below its 2011 peak of 0.71%.

“We wonder, if the current cycle were to continue for a sufficient period of time, could the 0.71% be reached again? It seems possible in our view,” the analysts said. “Assuming no change to the current world equity total market capitalization, the global gold sector at 0.71% of the world total would imply a market capitalization of around $990bn.”

Although the mining sector is beginning to attract capital, analysts noted that valuations remain below prior market peaks.

BofA said that on a twelve-month EV/EBITDA basis, the sector is trading at 11.0x, down from the 2020 peak of 15.4x. Meanwhile, on a price-to-net asset value basis, the sector is trading at 1.88x, compared to the 2020 peak of 2.27x and the 2011 peak of 2.19x.

“Both measures suggest room for valuation to expand. If we adjust current multiples for spot gold prices, the current sector NTM EV/EBITDA multiple is 11.7x and the current P/NAV is 1.39x, suggesting even more potential upside to valuation multiples should the momentum continue,” the analysts said.

BofA’s bullish outlook on the gold mining sector comes as the bank still sees plenty of upside momentum in commodity prices. Even after this year’s historic rally to record highs above $3,600 an ounce, commodity analysts maintain that the precious metal still has significant upside potential.

Bank of America expects gold prices to average around $4,000 an ounce in the second quarter of 2026. In a report published last month, the bank reiterated its bullish outlook, as it expects the Federal Reserve to kick off a new easing cycle later this week.

“Potential rate cuts amid rising inflation create fertile ground for dollar depreciation,” analysts wrote. “Rate cuts in an environment of persistently elevated inflation would, in all likelihood, push the precious metal higher.”

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