Tale of the Gold Miner Tape

The largest gold miner ETF (GDX) is up an impressive 63% so far in 2025.

Yet strangely, investors in the fund have been selling aggressively. So far this year they’ve sold $3.5 billion worth of GDX shares on net.

We can track this via ETF.com’s fund flows tool:

Source: ETF.com

As you can see by the red bars on the chart, investors have been steadily selling shares of GDX all year. There have only been a few brief periods of net inflows to the fund, as indicated by the green bars.

Gold miners have performed remarkably well this year. But the big miner ETFs, like GDX, are somehow seeing net fund outflows. It’s wild.

ETF investors are not buying the gold miner story yet. They seem to think the move in gold is just a fad. Despite soaring profitability and excellent performance by the underlying stocks.

This tells me that the people making money on gold miners this year are doing so mostly in individual stocks (as opposed to ETFs).

So it’s mostly gold bugs who know the space well enough to pick individual names that are currently invested.

This is an excellent sign for those of us who plan to be invested in miners for years to come.

Miners Are Still Cheap

Big gold miners like Newmont (NEM), which I own and like, are screaming higher. We mentioned it as a buy at around $45 back during the mini-crash in April. Today it’s trading at over $68.

Based on its positive price action, gold bugs have clearly been buying individual stocks like Newmont.

The crazy part is that NEM still looks cheap. It currently has a trailing P/E ratio of 12x, and a free cash flow yield of 7.1%. If the gold price stays at current levels, both metrics will continue to improve. If gold goes to $4,000, or $5,000, which I fully expect within the next few years, profitability should continue to soar higher for Newmont and other big producers.

There is still plenty of room for this bull market to run.

The Generalist Investors Haven’t Arrived Yet

Based on the fact that gold miner ETFs like GDX are still seeing outflows, your average investor is still avoiding the space. The masses are still obsessed with the tech bubble, unaware of the dangers if and when it pops.

When generalist investors start to flood into hard asset plays like precious metal miners, that’s when things get really exciting. They’ll be rushing out of crowded markets like tech and into ETFs like GDX, which will in turn push individual names in the fund higher.

This type of “passive flows” can help sustain a bull market as it progresses, as we have seen in the tech sector over the past decade.

So despite the fact that miners have risen so sharply this year, we continue to believe this bull market is just getting warmed up.

Of course, there will be corrections and bumps along the way. If (when?) we see a broad market crash, it’s likely that miners and bullion will initially fall as well. That’s what we saw in April, when we got a big correction in the S&P 500 and Nasdaq 100. Silver crashed 15% in 2 days, and Newmont fell 8% in one session. What a buying opportunity that was!

The broad market crash, when it happens, will be a gift for long-term gold and silver bugs. We’ll likely get a chance to buy bullion and miners at significant discounts. So it makes sense to keep some cash at the ready, earning a decent yield in a high-yield savings account or short-term treasuries.

Currently, the Mag 7 is supporting this market. When big tech starts to fall, we’ll almost certainly get a brief window to buy miners and metals at a nice discount.

That’s when the outperformance of precious metals will truly begin.