Gold miners’ stocks remain widely overlooked, flying under the radars of most speculators and investors. That’s unfortunate, as this high-potential sector’s technicals and fundamentals both support way-higher prices ahead. Naturally bullish enthusiasm will mount as gold stocks again challenge record highs. But the biggest gains will be won by shrewd contrarian traders willing to deploy early before the herd rushes back.
The GDX gold-stock ETF dominated by major miners remains this sector’s leading benchmark. But its performance lags the superior GDXJ mid-tiers gold-stock ETF. The smaller miners are better able to consistently grow their production operating fewer mines, which are often lower-cost and more-profitable than the majors’ stables. Smaller miners’ lower market capitalizations also make their stocks easier to bid higher.
So it makes sense to view sector performance through the more-responsive GDXJ lens. Its technical price action this year helps explain the recent apathy and mounting bearishness plaguing this sector. Gold-stock sentiment depends on perspective, primarily over what time frame traders are considering sector performance. We humans all have a recency bias, our minds unduly overweighting the latest price action.
Since gold Fed hysteria has unleashed some big down days in September, GDXJ dutifully followed and amplified its metal. Midweek it was down 5.2% month-to-date, which is actually quite resilient relative to gold’s parallel 3.7% drop. That’s merely 1.4x downside leverage, far milder than smaller gold stocks’ usual 3x to 4x+ range. And since GDXJ’s last record close exiting February, it is still down 22.4% in bear territory.
Thus traders even aware of gold stocks focusing on them in September or since peaking on the eve of Trump’s war with Iran have a glass-half-empty outlook. The primary driver of recent bearish sentiment was GDXJ getting hammered a brutal 41.3% lower in 4.7 months between cresting at that peak and mid-July! But it could’ve been much worse, as GDXJ only amplified gold’s parallel downside in that span by 1.6x.
Recency bias is dangerous for speculators and investors, leaving them extrapolating the latest price action out into the future. That leads them to buy high in greed-filled toppings after major uplegs, then sell low in fear-drenched bottomings after subsequent corrections. That’s the polar opposite of what must be done to multiply capital in markets. The antidote to recency bias is perspective, integrating longer-term context.
Rather than fixating on GDXJ’s outsized 4.4%, 4.0%, 3.6%, and 5.2% down days suffered in September, consider how recent action fits into the bigger picture. The minimum time frame necessary to do that is the past six months. So our popular decades-old monthly subscription newsletter has always led off with key six-month charts on its first page. Yet in particularly-volatile times, several years of perspective is better.
GDXJ utterly skyrocketed into late February’s peak, soaring 269.1% in just 13.9 months! That finally bested an old record close that had held for 15.2 years. And that was part of an even-bigger 406.6% secular bull born way back in early October 2023. Shrewd contrarian speculators and investors including our subscribers earned fortunes buying smaller gold miners early then later getting stopped out near the topping.
In 2025 alone, GDXJ rocketed fully 166.2% higher! After massive bull runs like these, big selloffs are necessary and inevitable to rebalance extreme technicals and sentiment. In light of that context, GDXJ’s big 41.3% reckoning into mid-July 2026 is healthy and not excessive. That accomplished its mission, bleeding away the extreme herd greed in January and February ushering in today’s apathy and bearishness.
And from a broader technical perspective, even that serious drawdown is bullish for gold stocks in the grand scheme. That carved sharply-lower upper resistance and gradually-declining lower support, which formed a massive falling-wedge chart pattern. As I analyzed in depth in late July on gold’s own falling wedge when it languished near drawdown lows, these patterns are bullish usually resolving in big upside breakouts.
These reversal formations reflect slowing downside momentum in selloffs, as capital outflows gradually exhaust themselves. As traders looking to exit sell, that leaves less capital left to continue feeding the downside. The longer selloffs persist, the less selling fuel remains. And as prices stabilize, contrarian buyers including our subscribers fight herd fear to step in and snatch up relative bargains left by serious selloffs.
The really-bullish outlook for mid-tier and junior gold miners surrounding mid-July’s deep lows wasn’t just related to GDXJ’s massive falling wedge. At its nadir that superior benchmark had been hammered back to just 79.6% of its baseline 200-day moving average. That proved the most oversold smaller gold stocks had been in fully 3.7 years, since early November 2022! Extreme oversoldness portends imminent major reversals.
That was a monumental contrast from GDXJ skyrocketing 73.3% above its 200dma in late January 2026 then 64.9% above in late February! The former proved a 9.5-year secular high in overboughtness, which almost certainly heralded a major topping. The extreme speculative excesses earlier this year were fully eradicated by the necessary and healthy severe reckoning since. And you don’t have to take my word for it.
When I was writing bullish essays on gold and thus its miners’ stocks in July surrounding those deep lows, there was plenty of skeptical feedback. I heard from lots of readers convinced gold and gold stocks were still heading well lower. Their recency biases led them to extrapolate recent months’ downtrends well out into the future. Lacking broader perspective, they failed to recognize all the technical reversal signals.
But looking back benefitting from subsequent context, aggressively buying battered smaller gold stocks this summer as we did in our subscription newsletters was absolutely the right call. From mid-July to late August, GDXJ rocketed up an astounding 48.3% in just five weeks! So zero doubt remains that GDXJ’s massive falling wedge and deep secular oversoldness last summer were indeed bullish omens for gold stocks.
And this sector’s newfound strength remains small compared to past bulls. Up 48.3% at best in the past 2.1 months pales in comparison to that 406.6% over 28.8 months into late February! Gold stocks have lots of room to run yet in this young bull market, and mid-tiers and juniors will lead the way like always. While plenty of technical arguments support mounting gains ahead, fundamental ones are even more compelling.
For over a decade now, after every quarterly earnings season I’ve done deep dives into the GDXJ-top-25 component stocks’ latest results. All that analytical work is distilled into essays, with the last one covering the GDXJ top 25’s Q2’26 published in mid-August. Any traders apathetic or bearish on gold stocks today ought to read that, as smaller gold miners’ fundamentals are epically-bullish supporting way-higher stock prices.
The cleanest metric to distill down dozens of gold miners’ quarterly results into overall sector performance is implied unit earnings. That simply takes the GDXJ top 25’s average all-in sustaining costs per ounce and subtracts it from quarterly-average gold prices. Last quarter these mid-tier and junior gold miners earned a colossal $3,214 per ounce! That soared 67.6% year-over-year, and only Q1’26 saw higher unit profits.
As I explained in that essay, those Q2’26 results would’ve been fantastic in isolation but merely extended a truly-epic trend. Over the last twelve quarters ending in Q2, the GDXJ top 25’s implied unit earnings have soared 106%, 133%, 63%, 63%, 71%, 95%, 91%, 79%, 82%, 102%, 131%, and that 68% YoY! No other sector in all the stock markets can rival that spectacular earnings-growth track record, it is unparalleled.
The smaller gold miners are earning such fat-and-rich profits that the GDXJ top 25’s average trailing-twelve-month price-to-earnings ratio in mid-August ran just 16.1x! Those were the lowest valuations seen in at least the last 41 quarters I’ve been advancing this research thread, and maybe ever. Not long after smaller gold stocks traded at record-high prices, their valuations remained dirt-cheap due to stellar earnings.
And this amazing earnings-growth streak isn’t over. With Q3 nearly in the books, gold has averaged fully $4,266 quarter-to-date despite its serious reckoning into mid-July. That makes for gold’s third-highest quarter ever, only behind Q1’s $4,873 and Q2’s $4,512! And while we can’t know what the GDXJ top 25’s average AISCs will be until after Q3’s earnings season in mid-November, we can make a solid guess.
In the last four reported quarters ending Q2, those ran $1,369, $1,490, $1,436, and $1,298 per ounce. That averages $1,398. Many mid-tiers and juniors have guided to higher outputs due to mine expansions in 2026’s second-half compared to its first-half. And more ounces to spread mining’s big fixed expenses across usually leads to proportionally-lower unit costs. Q1 and Q2 averaged $1,367, Q3 and Q4 should be better.
So a $1,350ish GDXJ-top-25 average in Q3 wouldn’t surprise me at all, but to be conservative let’s assume mid-tiers’ and juniors’ AISCs prove well worse. If they come in closer to $1,450, the GDXJ top 25 will still earn around a colossal $2,816 per ounce in Q3! That would be the third-highest ever after Q1 and Q2, and surge another 35% YoY on top of Q3’25’s huge 82% jump! Gold miners are earning money hand-over-fist.
These upcoming Q3 results releasing from late October to mid-November will force already-low gold-stock valuations even lower. Eventually all stock prices must reflect some reasonable multiple of their underlying corporate earnings. The most-bullish argument for gold stocks today isn’t their technicals, but their still-undervalued fundamentals. Sooner or later traders will return, gradually bidding stock prices way higher.
As a small contrarian sector, gold stocks have mostly been ignored and neglected for years. While that popularity pendulum started swinging back the other way in recent years’ enormous secular bull, that was overshadowed by the all-consuming AI stock bubble. So investor participation in this high-flying sector remains low, both in absolute-capital and percentage-of-portfolio terms. That should head considerably higher.
Gold and its miners’ stocks will never top market leaderboards for mainstream trader enthusiasm, and they don’t have to. A couple weeks ago I wrote an essay on gold investment rebounding. In it I pointed out that the best proxy for American stock investors’ gold allocations is currently running around one-third of one percent! And gold-stock allocations are likely similar, with GDXJ’s net assets running a trivial $9.0b.
So if speculators and investors tripled or quadrupled their gold and gold-stock allocations in coming years as their bull runs continue, they’d still be immaterial relative to overall portfolios. Maybe on the order of one-to-two percent. Yet tripling or quadrupling the amount of capital deployed in gold stocks should force their stock prices proportionally higher. This overlooked contrarian sector still has massive room to run.
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The bottom line is gold stocks remain widely overlooked. Following a necessary serious reckoning, this high-flying sector has been largely forgotten. Early 2026’s extreme greed and overboughtness have fully mean-reverted to apathy, bearishness, and oversoldness. Yet both smaller gold stocks’ technicals and fundamentals still support big gains to come. A young new bull market sure looks to be getting underway.
The mid-tiers and juniors recently blasted higher in a huge breakout from a massive bullish chart pattern. Their valuations remain near their lowest levels in at least a decade and likely ever. Their upcoming Q3 earnings are going to prove their third-highest ever, extending an extraordinary multi-year streak of huge profits growth. Speculators and investors still have vast room to buy and chase, fueling way-higher stock prices.
Adam Hamilton, CPA
September 25, 2026
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