Gold Miners Are a Screaming Buy Here
Gold went on a huge run from 2022 to 2026.
It broke records, hit prices we didn’t expect to see for years, and went almost completely unnoticed by most investors.
However, since the war in Iran, the gold price has retreated. While facts are scarce, this is an indication of a big seller (like central bank big). According to the World Gold Council, central banks sold 115 metric tons of gold led by Turkey, Russia, Azerbaijan, and Kyrgyzstan.
However, if we look back at history, gold performs great in situations like today. Specifically, when oil shocks create stagflation. If you add rising inflation and falling interest rates to that, it’s even more bullish for gold.
We know that inflation is ripping right now. Oil prices are up 60% since the Iran war started and up 80% since the start of 2026. U.S. headline inflation (CPI) was 3.3% and energy prices were up 12.5% year over year.
And we know that the new Federal Reserve chairman, Kevin Warsh, wants to cut rates. His dovish outlook on interest rates is the reason Trump nominated him in the first place. And Trump is a real estate guy at heart. Low interest rates are key to a booming real estate market.
I doubt he’ll be able to raise rates here. Inflation is well above the 2% target in the U.S. But gold will do just fine against the dollar if the rates stay the same. And that’s the likely scenario for the rest of 2026.
That sets us up for further upside in the gold price. But don’t rush out and buy bullion. There’s a better way. You see, gold miners are generating massive amounts of cash at the current gold price.
Gold miners took a beating since the Iran war kicked off, as you can see here:
The big companies like Newmont (NEM), Agnico Eagle (AEM), and Barrick (B) are cheap today. On a trailing price to earnings (PE) basis, these companies trade for 14, 17, and 11 times earnings, respectively. To put that in perspective, the S&P 500 average is between 25.5 to 26.5 times earnings.
That means gold miners are trading at a huge discount to the stocks in the S&P 500.
But that’s looking backward. If we project forward, gold miners look even better. The S&P 500 forward PE is between 21 and 22 times. Those same major mining companies’ forward PE’s are: 9.3, 11.9, and 9.5 times respectively.
That’s cheap. Really cheap. And we believe gold prices are going to go up. That means the earnings for these companies should go up further.
All that adds up to a fantastic opportunity to buy gold miners. We expect the bull market to resume. The environment is positive for the price of gold to rise. And that is bullish for the gold mining sector. And the mining companies are cheap compared to the S&P 500.
If you wanted a reason to buy gold miners, there you go.
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