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Precious metals just enjoyed one of their greatest years ever, if not the greatest! Gold, silver, platinum, and their miners’ stocks skyrocketed in 2025, multiplying contrarian investors’ wealth. More importantly, this year’s enormous gains radically improved mainstream investors’ sentiment on precious metals. After mostly ignoring this important sector for long years, now everyone finally realizes PM allocations are essential.
Year-end is always a time of reflection. Around Christmas, the tyranny of the present and our endless busyness yields to a much-wider temporal perspective. As we spend joyous time with our families, we contemplate the past when our kids were younger. We look back on another year of hard work and give thanks for everything we were blessed to accomplish. We also optimistically look forward to a better year ahead.
Rewinding a year, 2024 certainly wasn’t bad for gold. The yellow metal powered 27.2% higher last year, actually besting the S&P 500’s parallel 23.3% gain. But mainstream investors really didn’t care, precious metals remained languishing in apathy. Gold has always been the linchpin driving the entire PM complex. Silver, platinum, and especially miners’ stocks tend to trade like gold sentiment gauges, amplifying its moves.
Silver rallied 21.5% in 2024, decent absolutely but really lagging gold. The global silver market is about 1/8th the size of gold’s, so silver really leverages gold’s upside when bullish psychology mounts. The lack of mainstream excitement about gold a year ago was also sure evident in platinum. It normally trades much more like an industrial metal than a precious one, yet still slumped 8.4% in 2024 despite supply constraints.
But nothing reflected the lack of interest in PMs a year ago like gold stocks. There are two leading gold-stock benchmarks, the GDX and GDXJ ETFs. The former is dominated by large major gold miners, the latter by smaller mid-tier and junior gold miners. GDX only climbed 9.4% last year, for horrendously-bad 0.3x upside leverage to gold. Historically GDX has tended to amplify material gold moves by 2x to 3x.
If gold stocks can’t greatly outperform their metal, they’re not worth owning. In addition to all gold’s own global-supply-and-demand risks, miners heap on additional big operational, geological, and geopolitical risks. Investors need to be well-compensated for bearing those, in the form of outsized gains. GDXJ didn’t fare much better in 2024, only rallying 12.8%. Just awful 0.5x leverage, smaller miners should do 4x+!
A year ago this week, I wrote an essay on Gold’s Remarkable Year. It analyzed gold’s massive breakout to many new records, despite “American stock investors enthralled by the AI stock bubble totally sitting out, multiple bouts of dangerous extreme overboughtness, exceedingly-overextended near-record spec gold-futures longs, and a powerful dollar rally!” Big global demand including from central banks overcame all that.
One week later as January 2025 dawned, I predicted this year would be Gold Stocks’ Revaluation Year. That was a hardcore contrarian call at the time, and I got a lot of flak for it then. GDX and GDXJ had just slumped to deep seriously-oversold lows well under their baseline 200-day moving averages. So gold-stock psychology then was really bearish, with gold and silver miners largely being left for dead by investors.
I concluded a year ago “2025 has great potential for gold stocks to enjoy a major-paradigm-shift revaluation higher. Gold just experienced one last year, which gold stocks greatly lagged. Despite the gold miners earning massive record profits, investors weren’t interested. Gold hadn’t yet rallied high enough for long enough to convince them of its staying power, and the AI stock bubble stole the limelight from everything else.”
“But with gold consolidating high instead of plunging after soaring in 2024, these much-higher prices are becoming the new normal. That makes gold miners’ fat-and-rich profits durable, leaving their stocks deeply undervalued. Fund managers will increasingly notice that, and start upping their tiny allocations. The resulting gold-stock gains will turn psychology bullish again, fueling increasing buying normalizing prices.”
Boy that would prove true in spades! With the book about to close on 2025, GDX and GDXJ have skyrocketed an extraordinary 163.9% and 177.3% year-to-date as of Christmas Eve! Those colossal gains amplified gold’s huge 70.7% YTD by a far-better 2.3x and 2.5x, reflecting wildly-improved mainstream psychology. That spilled into silver and platinum too, which have also skyrocketed an epic 148.9% and 148.2% YTD!
Don’t skim over those phenomenal results without giving them time to sink in. The S&P 500 had a good 2025 too, but merely rallied 17.9% YTD. Dominant AI market-darling NVIDIA had a great year, but is just up 40.4% YTD. The precious-metals returns this year have truly been mind-boggling! Given those, gold, silver, and their miners’ stocks ought to be far more popular than they are despite big improvements in that.
Again gold is the engine pulling the entire precious-metals train, with bullish gold psychology spilling into the rest of the complex. A major factor in gold’s greatest year ever is American stock investors finally starting to return. An excellent proxy for their gold allocations is the combined bullion holdings of the world-dominant US GLD, IAU, and GLDM gold ETFs. They reflect stock-market capital flows into and out of gold.
In 2024 when gold remained forgotten by mainstream investors, GLD+IAU+GLDM holdings only edged up a trivial 0.1%. That reflected no differential gold-ETF-share buying by American stock investors, who were enthralled by the AI bubble. But so far in 2025, these holdings have surged a strong 26.8% to a 4.9-year secular high of 1,739 metric tons! Investors are finally realizing how essential gold allocations are.
The dominant silver ETF is SLV, and it too enjoyed accelerating stock-market capital inflows this year. SLV’s bullion holdings grew 5.7% in 2024, then another 14.4% YTD in 2025 to 529m ounces. That just returned them to a 3.5-year secular high. While the GLD+IAU+GLDM builds were more gradual throughout this year, almost half of 2025’s SLV builds rapidly accrued in this past month as silver soared in a near-parabola.
That’s a serious concern heading into 2026. From a short-term-timing perspective, absolute price levels don’t matter much. What’s really important is how fast they got there. Big-and-fast surges dramatically ramp near-term downside risks because they leave prices increasingly overbought. An easy way to measure that looks at prices as multiples of their trailing 200-day moving averages, ideal slowly-evolving baselines.
Midweek gold, silver, platinum, GDX, and GDXJ are all stretched a truly-extreme 25.2%, 72.9%, 67.2%, 46.0%, and 50.4% above their respective 200dmas! All are deep into dangerous extreme-overbought territory, portending either big-and-fast selloffs or longer sideways drifts. Both are crucial for keeping major bull markets healthy, rebalancing away unsustainable technicals and sentiment before they slay bulls.
Prices divided by their 200dmas charted over time reveal oversold-to-overbought trading ranges. During these past five calendar years, extreme overboughtness has started at 18% above gold’s 200dma, 30% over silver’s, and 35% above GDX’s. Not only are current levels far above those warning thresholds, gold and GDX were way worse back at mid-October’s initial peak. Gold stretched 33.0% over its 200dma, and GDX 62.9%!
That proved gold’s seventh-most-overbought close since April 1980, top 0.1% in 45.8 years since! That odd starting date gets gold past the once-in-a-lifetime severing-dollar-from-gold huge cyclical bulls seen during the 1970s. Remarkably gold’s current monster bull hasn’t seen a single 10%+ correction in over two years! On Tuesday, that extended to epic record 146.8% gains over 26.6 months since early October 2023!
As I analyzed in mid-October, that makes this gold’s biggest cyclical bull since 1971 which means ever in dollar terms! This monster dwarfs second place, gold’s famous 127.9% superspike into January 1980. But big-and-fast gains demand rebalancing reckonings. After the next-ten-largest gold cyclical bulls since 1971 starting with January 1980’s, gold’s average drawdown was also big and fast at 20.8% over just 2.1 months!
Alternatively gold could almost miraculously consolidate high again for the fourth time in this epic record bull. Sideways drifts accomplish the same rebalancing mission as big drawdowns, but take much longer to do so. Sharp plunges eviscerate herd greed, while drifts gradually bleed it away. I wrote a whole essay a couple weeks ago analyzing this monster bull’s earlier high consolidations and their implications today.
Given the extreme overboughtness ubiquitous in precious-metals-land today, I sure wouldn’t rush to buy way up here! Markets are forever-cyclical, flowing two steps forward before ebbing one step back. Gold, silver, and their miners’ stocks will come in again as always, narrowing those vast gaps to their 200dmas. The closer they fall to those baselines, the greater the probabilities buying relatively-low there will prove successful.
Short-term extreme-overboughtness concerns aside, gold’s fundamentals remain really bullish supporting further future gains after a healthy rebalancing selloff or drift. The single-most-bullish argument for gold today is American stock investors’ still-really-low portfolio allocations. Those combined GLD+IAU+GLDM holdings are worth $251b midweek. That’s certainly a big chunk of change, but still tiny in the grand scheme.
The combined market capitalization of all 500 S&P 500 stocks is now running a staggering $62,913b! Thus American stock investors’ implied portfolio gold allocation is still way down near 0.4%, rounding to zero! That’s astounding, especially with gold at lofty all-time-record highs. Realize American stock investors control the great majority of global stock-market capital, so them gradually returning to gold is huge.
For centuries, minimum gold portfolio allocations of 5% to 10% were universally recommended. Given gold’s highly-valuable unique diversifying attributes, it’s easy to make a case for 20%. But even if American stock investors’ gold allocations only grow to a still-immaterial 2% to 3%, the coming capital inflows into gold will be vast. They will join ongoing strong central-bank and foreign demand to drive gold much higher.
And despite gold stocks also being extremely overbought in need of a rebalancing, their fundamental case remains breathtakingly-bullish. I’ve been intensely studying them, actively trading them, and writing about all that in our popular subscription newsletters for over a quarter-century now. Before I founded Zeal in early 2000, I was a Certified Public Accountant auditing mining companies for one of the biggest firms.
I’ve kept my CPA license active ever since, and one of my specialties remains deep analysis of gold and silver miners’ fundamentals. Every quarter I dig into the latest operational and financial results reported by the top-25 component stocks in both GDX and GDXJ. I last updated that incredibly-valuable analysis thread in mid-November for the GDX majors then a week later for the GDXJ mid-tiers, analyzing Q3’25 results.
That was my 38th quarter in a row advancing this unique research. The gold miners dominating both of these leading sector ETFs achieved epic record earnings with record gold, as their profits leverage the metal! But one phenomenal quarter isn’t the bullish case for gold stocks going forward, it is a long string of them leaving the miners still quite undervalued relative to prevailing gold prices. Their profits growth is jaw-dropping.
The best proxy for how gold miners are faring as a sector is implied unit profits. Those take the GDX top 25’s and GDXJ top 25’s average all-in sustaining costs per ounce in any quarter then subtract them from its quarterly-average gold price. That is much cleaner than bottom-line accounting profits, which are often distorted by unusual non-cash items. The gold miners’ earnings growth in recent years dwarfs all other sectors’.
Over the past nine reported quarters starting in Q3’23 which was just before gold’s monster record bull was born, the GDX-top-25 majors’ implied unit earnings have skyrocketed 87%, 47%, 31%, 75%, 74%, 78%, 90%, 78%, and 83% year-over-year! And the GDXJ-top-25 mid-tiers’ per-ounce profits soared an even-better 106%, 133%, 63%, 63%, 71%, 95%, 91%, 79%, and 82% YoY! Holy freaking cow that’s awesome!
And this current Q4’25 will continue that unparalleled-in-all-the-stock-markets colossal-earnings-growth trend. Once this quarter wraps up, I’m thinking about writing a whole essay delving into that next week. The gold miners’ Q4’25 results due out by early March since they include audited annual numbers will again prove stupendous records. Gold is averaging a record $4,135 quarter-to-date, soaring an epic 55.4% YoY!
So even if gold, silver, and their miners’ stocks roll over into serious drawdowns out of recent extreme overboughtness, the miners’ fundamentals remain fantastically amazing. There’s likely an excellent buying opportunity approaching early in 2026, much closer to GDX’s and GDXJ’s 200dmas. So if you haven’t yet jumped on the gold-stock train, another stop is coming. The getting should be good again by later next year.
It sure as heck was in 2025! We added extensive newsletter trade positions late last year and throughout this one when gold and gold stocks were less overbought. All those were stopped out in mid-October as both gold and GDX suffered brutal top-0.3%-in-their-history daily plunges. Yet our 60 newsletter stock trades realized in 2025 including all losers still averaged truly-spectacular annualized realized gains of +119.9%!
We can’t know how 2026 will play out in markets, but we can game probabilities based on long historical precedent. And the fundamental cases for gold and its miners’ stocks remain bullish going forward. Yes some kind of rebalancing selloff or consolidation is needed, but those are totally normal and healthy periodically. These bull runs will continue on bullish global supply and demand and increasingly-bullish herd sentiment.
The bottom line is precious metals enjoyed their greatest year ever in 2025! Gold, silver, platinum, and their miners’ stocks skyrocketed to utterly-massive gains. That multiplied the wealth of contrarian investors, but more importantly really shifted mainstream investors’ precious-metals psychology back to bullish. After mostly ignoring this essential asset class for long years, investors now realize they need to own PMs.
Their stupendous gains this year have left them extremely overbought, all but guaranteeing either big-and-fast drawdowns or slower high consolidations to rebalance unsustainable technicals and sentiment. But the fundamental cases for gold and its miners remain strong. American stock investors have barely started allocating capital into gold, and miners’ earnings continue soaring to epic records keeping them undervalued.
(By Adam Hamilton)
