From 2020 to 2023, I worked in the mining business... My job wasn't anything technical, like deciding where to dig holes in the ground. I managed investor relations with U.S. institutions. Think endowments, foundations, and pension funds.
Not All Gold Investing Is the Same
By Joe Austin, senior analyst, Chaikin Analytics
From 2020 to 2023, I worked in the mining business...
My job wasn't anything technical, like deciding where to dig holes in the ground. I managed investor relations with U.S. institutions. Think endowments, foundations, and pension funds.
My employer was a private-equity company based in Sydney, Australia. The firm invested in all kinds of mining operations across the globe.
Every senior executive had run a mining operation at one point. That was a major selling point for the company. And it gave me a front-row seat to how the mining business really worked.
It was an education I never expected. Mining turned out to be one of the most fascinating industries I had ever encountered.
Some of it covered metals that everyone knows – like copper, aluminum, iron, steel, and nickel.
Through them, I learned about the complexities in the space with geopolitics... supply chains... and environmental, social, and governance ("ESG") characteristics. It's all more connected than you might think.
Then there were metals I had never heard of – like vanadium and molybdenum. Both of those harden steel.
Vanadium makes construction rebar strong. And molybdenum makes stainless steel corrosion resistant.
However, gold was the most fascinating of them all...
It has limited industrials use. But its role as a store of value and "safe haven" asset made it an asset class unto itself.
That status shows clearly in the public mining equity markets. Gold dominates them.
Of the 156 companies that S&P Global categorizes as related to metals and mining, 57 either operate gold mines or are focused on gold mine development.
That compares with 24 companies focused on iron/steel, 10 on copper, and five on aluminum.
And out of 11 publicly traded royalty/streaming companies, nine focus on gold and/or precious metals.
(I'll make a quick note on my methodology here. Major mining companies produce all kinds of metals. But I've categorized each by its biggest output. I also excluded hundreds of mining equities traded in Canada and Australia.)
From 2020 to 2023, it felt like you couldn't give gold companies away...
In January 2020, gold cost about $1,580 per ounce. That was roughly 13% below its 2011 peak.
By January 2023, it had climbed to around $1,928. However, that only marked a roughly 15% gain over the previous 10 years.
Meanwhile, over those 10 years, the S&P 500 Index had more than doubled. Most investors – including those big endowments, foundations, and pension funds – had little interest in gold.
By now, all that has changed...
Shares of the SPDR Gold Shares (GLD) – the largest physically backed gold exchange-traded fund ("ETF") in the world – soared by about 64% last year.
And whenever people find out I worked in mining, they ask me if I'm "bullish" or "bearish" on gold.
The truth is that gold is a market that humbles everyone.
It trades on sentiment. The usual supply and demand dynamics don't apply.
Prices for the metal have gone so far so fast. For investors, that also raises the question of whether mining stocks or just buying gold is a better move.
And if mining stocks are the better route, that doesn't mean just blindly piling in to any stock in the space...
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Comparing Five Approaches to Gold Investing
In the mining business, not all companies carry the same amount of risk...
Producers generate revenues from pulling things out of the ground. They're less risky than explorers – since those firms have no revenue until they develop a working mine. And there's no guarantee that they'll be able to do that.
Size matters, too.
A company that runs multiple mines across multiple jurisdictions is less risky than a small company with just one or two mines.
The restaurant business is a good analogy...
If you own one restaurant and there's a fire in the kitchen, it could put you out of business. If you own 10 restaurants and one kitchen catches fire, it's easier to stay in the game.
That's why there are three main kinds of operating companies in mining...
The majors – or integrated miners – run multiple mines across multiple jurisdictions. Junior miners have revenue but are still relatively small operations.
And explorers have no revenue. They're simply betting that they'll find something worth digging up.
Investors also have a fourth option in royalty and streaming companies...
These businesses finance mine development. Then they take a cut of production once the mining starts.
A fifth option is to just buy gold "outright" – by using an ETF that tracks the metal directly. The easiest way is via GLD.
To compare the approaches, I tracked returns for all five groups in 2024, 2025, and 2026 through the end of February. I also looked at their total gains over the full period.
The clear winner was the junior miners. They beat every other group across all four periods – up 404% in total.
The laggards were the streaming companies and GLD. They gained 198% and 150%, respectively, for the full period.
And when the price of gold soared in 2025, all three groups of mining stocks outperformed GLD by a wide margin.
Take a look...
So, based on my analysis...
If you're still "bullish" on gold, sticking with the majors or the junior miners looks like a good idea. Overall, the returns have been better. And the risk is lower.
Explorers might be tempting. But they lagged companies that actually produce gold and generate revenue. And streamers aren't even close.
The majors and juniors have another thing going for them – they're flush with cash.
Investment bank Jefferies recently noted that nine of 12 miners under its coverage had net cash positions.
And with all-in costs of less than $2,400 per ounce against a gold price at roughly $5,200 per ounce, margins are fat. The sector is ripe for mergers and acquisitions.
Of course, keep in mind that sentiment can turn on gold. And when that happens, stocks in the space can fall hard. I saw it firsthand when I worked in the mining business.
But when it comes to big gains with gold stocks, keep your eye on the majors and junior miners.
Good investing,
Joe Austin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.1%
7
19
4
S&P 500
+0.06%
119
285
94
Nasdaq
+0.13%
23
49
28
Small Caps
+0.92%
570
962
350
Bonds
-1.33%
Energy
+2.0%
12
10
0
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are somewhat Bullish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Energy
+3.43%
Industrials
+2.33%
Communication
+2.18%
Utilities
+1.48%
Financial
+1.12%
Information Technology
+0.74%
Real Estate
+0.71%
Materials
+0.55%
Consumer Discretionary
+0.37%
Health Care
-0.01%
Consumer Staples
-0.29%
* * * *
Industry Focus
Retail Services
7
41
25
Over the past 6 months, the Retail subsector (XRT) has underperformed the S&P 500 by -5.04%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #19 of 21 subsectors and has moved down 2 slots over the past week.
Indicative Stocks
CAL
Caleres, Inc.
TSCO
Tractor Supply Compa
BKE
The Buckle, Inc.
* * * *
Top Movers
Gainers
NOC
+6.02%
MPC
+5.86%
PLTR
+5.82%
AXON
+5.46%
COIN
+5.34%
Losers
AES
-17.77%
NCLH
-10.53%
EL
-8.48%
ELV
-8.1%
TEL
-7.89%
* * * *
Earnings Report
Earnings Surprises
CRDO Credo Technology Group Holding Ltd
Q0
$1.07
Beat by $0.13
MDB MongoDB, Inc.
Q4
$1.65
Beat by $0.18
RIOT Riot Platforms, Inc.
Q4
$-1.88
Missed by $-1.49
* * * *
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