Crazy data shows wildly profitable gold miners are still on sale

Gold is on an unbelievable tear, now resting above $3,900 per ounce. And the reason is simple.

Most foreign governments and central banks around the world have traditionally held the overwhelming majority of their strategic financial reserves in US dollars.

And that made sense. The US dollar has been the undisputed global reserve currency for more than 80 years, backed by unshakable confidence in America’s wealth and governance.

But that sentiment has changed rapidly over the past few years.

Whether it’s the $37+ trillion national debt, or politicians’ inability to pass a budget (resulting in yet another government shutdown), or the weaponization of the US dollar, or the downgrade of the US sovereign credit rating, or a laundry list of other embarrassments, pretty much every finance minister and central bank around the world has reason to doubt American.

And that’s why they’ve been diversifying their strategic financial reserve away from the US dollar.

Unfortunately for these foreign officials, they have very few options to diversify. In fact, as it stands right now, gold is realistically the only choice: it’s the only asset that ticks all the boxes needed in a strategic financial reserve: it’s globally accepted, highly liquid, and with a large enough market to absorb hundreds of billions of dollars of capital flows.

We’ve been writing about this for the past two years, explaining to our readers not just WHY gold was going up… but predicting that it would continue to do so… when gold hit $2,000, then $2,500, then $3,000, then $3,500. The surging gold price has always been about central banks.

But now it’s no longer just central banks piling into gold. Even small, individual investors are gobbling up gold as well— which is an enormous shift from even just a couple months ago.

In May, for example, the largest physical gold ETF, GLD, saw net outflows of gold, i.e. individual investors in the US were selling.

But that trend has reversed hard. By mid-September, in fact, the GLD gold ETF saw a $2.2 billion inflow in a single day— the highest in its 21-year history. And those inflows translate into physical gold purchases.

Here’s something that’s really bizarre, though:

While record amounts of capital inflows are going into ETFs that buy and hold physical gold, there are net capital outflows from gold miner ETFs.

The most prominent among them is the VanEck Gold Miners ETF, ticker symbol GDX. The GDX holds the world’s major gold producers like Barrick, Agnico Eagle, Newmont, Kinross, etc.

And yet while those individual mining companies have been doing exceptionally well, GDX continues to see net outflows to the tune of nearly $2 billion over the past several months.

This is pretty crazy when you think about it. Gold miners’ revenue is denominated in gold. And given that, for many of them, their production costs are relatively fixed right now, these mining companies are making money hand over fist given gold’s meteoric rise.

Gold companies are raking in record profits. Yet the GDX saw $600 million in net outflows just last month alone (September 2025) .

In other words, net outflows from the ETF that owns ridiculously profitable gold miners… but record inflows into the ETF that is buying gold at its all-time high.

This doesn’t make sense to me. While we think the case for higher gold prices (over the long term) is very strong, at the moment we believe there’s a LOT more value in the shares of gold mining companies.

Some of the smaller gold producers that we focus on in our investment research are still trading a laughably cheap valuations; I’m talking about profitable, dividend-paying businesses with huge growth potential trading for less than 5x forward earnings.

The really crazy part is that many of these companies have already seen legendary gains.

Some of the companies featured in our premium investment research service have seen gains in excess of 4x this year alone. And yet their earnings are growing so rapidly that these companies’ shares STILL trade for less than 5x forward earnings.

That kind of disconnect doesn’t usually last.

These companies will be reporting their Q3 earnings over the next few weeks. And our assessment is that their share prices will surge even higher on the news of their record profits.

We put an extraordinary amount of effort into picking great businesses, i.e. deeply undervalued yet wildly profitable gold (and other real asset) companies that have pristine balance sheets, huge growth potential, top quality management, and more.

If you’d like to find out more about our research and take advantage of a limited time promotional discount— especially before these companies report what we believe will be record Q3 earnings— click here to learn more The 4th Pillar investment research newsletter.

Source

Simon Black is an international investor, entrepreneur and permanent traveler. His daily letter is both educational and entertaining, and we suggest that those who want unbiased, actionable information about global opportunities sign up for Sovereign Man’s free, actionable newsletter at http://www.SovereignMan.com.

From Simon Black of SovereignMan.com

Source: https://www.schiffsovereign.com/trends/crazy-data-shows-wildly-profitable-gold-miners-are-still-on-sale-153650/