Gold Holds Firm as Junior Miners Regain Momentum
July 11, 2025
Read Time 5 MIN
Monthly gold market and economic insights from Imaru Casanova, Portfolio Manager, featuring her unique views on mining and gold’s portfolio benefits.
Gold Holds Firm as Junior Miners Regain Momentum
Flight to Safety Drives Gold to New Highs
Investors once again sought shelter in gold during turbulent times. On June 13, gold prices climbed to a new all-time high, $3,432.34 per ounce, driven by escalating geopolitical tensions following Israeli strikes on Iranian nuclear sites.
As tensions around the conflict eased and U.S. trade negotiations evolved throughout the month, equity markets rebounded, supported by strong corporate earnings that bolstered investor confidence. The S&P 500,1 Nasdaq Composite2 and Dow Jones Industrial Average3 indices all closed at record highs on June 30. While gold was pressured by this shift in sentiment, it remained resilient, closing at $3,303.14 per ounce on June 30, a modest monthly gain of $13.89 per ounce (0.42%).
Gold Stocks Outperform Despite Flat Metal Prices
Gold mining equities, as represented by the NYSE Arca Gold Miners Index (GDMNTR),4 once again managed to post a gain (up 3.03% in June), despite gold’s flat performance and the broader equities’ strong recovery. In both 2023 and 2024, whenever gold prices drifted sideways without much momentum, gold equities tended to experience sharp declines (see charts below). This downturn also corresponded with declining investor interest in gold, as evidenced by outflows out of the gold bullion ETFs.
Source: Bloomberg. Past performance is no guarantee of future results. Index performance is not representative of strategy performance. It is not possible to invest in an index.
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Source: Bloomberg. Past performance is no guarantee of future results. Index performance is not representative of strategy performance. It is not possible to invest in an index.
It is encouraging to see gold equities outperforming the metal since mid-April, despite relatively flat gold prices over the same period.
Source: Bloomberg. Past performance is no guarantee of future results. Index performance is not representative of strategy performance. It is not possible to invest in an index.
Why Gold Equities Are Gaining Momentum
Gold equities’ outperformance makes sense to us. Gold companies are realizing record margins at current gold prices – they don’t require higher gold prices to continue to deliver strong free cash flow, and with average all-in sustaining costs for the sector at around $1,600 per ounce, they can in fact stay profitable at a gold price much lower than the spot price today.
We believe another factor providing support for gold equities this year is western investment demand once again acting as an important driver of gold prices—unlike in 2023 and 2024 when central bank demand acted as the main driver. Central banks and Asian investors don’t typically buy gold equities, but western investors do; their return to the gold markets should continue to support a re-rating of the gold mining sector.
Despite their strong performance so far this year, gold equities are still trading at historically low valuations. Scotiabank estimates that for their universe of senior gold producers, current stock prices, on average, reflect a 30% discount to spot gold prices. Thus, continued outperformance of gold stocks relative to the metal, even in a flat gold price environment, is justified in our view. Meanwhile, the small-cap or junior gold mining companies, which have lagged gold and the larger companies in recent years, appear to be staging a comeback.
Our Approach to Investing Across the Gold Spectrum
We invest across the full spectrum of gold companies, seeking quality properties and capable management teams. Our top positions consistently execute well on their operations and growth strategies. However, there is also significant value to be found in companies that rarely show up in our top holdings. Junior developers, companies in early stages of development ranging from early drilling to detailed engineering, don’t have any mines in production or generate revenues. There are hundreds of such companies listed mainly on Canadian and Australian stock exchanges with projects scattered around the world. They are credited with 60% to 70% of all significant gold discoveries globally.
A junior developer becomes investable for us when it demonstrates the potential to either:
- Become an attractive acquisition for a mid- to large-cap producer, or
- Develop a mine that forms the core of a newly emerging producer.
We prefer companies with at least two-million ounces of mineable gold and favorable geology, metallurgy and engineering characteristics, as well as a sound geopolitical setting. We maintain smaller portfolio positions in these companies because they are not as liquid and are more speculative than their larger producing peers.
Valuation and M&A Tailwinds for Junior Developers
Currently, there are 25 junior developers that meet our investment criteria. While we have frequently commented on the attractive valuations of the producers, it is noteworthy that the developers look even cheaper. One metric we use in our evaluation of these companies is Total Acquisition Cost (TAC) which is calculated as the sum of the estimated construction capital, life-of-mine operating and sustaining costs and market cap per ounce of mineable resource. We estimate that the companies in our junior developer universe carry an average TAC of $1,608 per ounce. Once built, they will make money at gold prices above $2,000 per ounce and become cash machines at current prices north of $3,000.
Total Acquisition Cost/Ounce
Source: VanEck, June 2025.
Whether we hold such companies in our portfolio depends on their relative valuations and how they rank on a number of factors, with their development timeline increasingly becoming more important for our selection. Investors and acquirors today appear to have little patience for the long permitting times that, unfortunately, have become common across the mining industry. The stocks seem to perform best early when drilling new ounces and later when reaching permitting/ financing/construction milestones.
Notably, sentiment seems to be shifting. From 2021 to 2023, junior developers underperformed the GDMNTR by 3.2% annually, with only one or two acquisitions per year. In 2024, there were four acquisitions at premiums ranging from 29% to 67% and the group of 25 outperformed by 36%. So far in 2025, they are up 14%, with two acquisitions already completed.
This momentum, combined with plenty of free cash flow and higher valuations, should support increased M&A activity in the gold mining industry as companies are much better equipped to advance their growth strategies. Junior companies could be the main beneficiaries in the current gold cycle.
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Important Disclosures
All company, sector, and sub-industry weightings as of June 30, 2025, unless otherwise noted.
Please note that VanEck may offer investment products that invest in the asset class(es) or industries included in this communication.
This is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results.
Please note that the information herein represents the opinion of the author, but not necessarily those of VanEck, and this opinion may change at any time and from time to time. Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. Any graphs shown herein are for illustrative purposes only. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
Diversification does not assure a profit or protect against loss.
Nothing in this content should be considered a solicitation to buy or an offer to sell shares of any investment in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction, nor is it intended as investment, tax, financial, or legal advice. Investors should seek such professional advice for their particular situation and jurisdiction.
1S&P 500 Index is widely regarded as the best single gauge of large-cap U.S. equities. The index is a float-adjusted, market-cap-weighted index of 500 leading U.S. companies from across all market sectors including information technology, telecommunications services, utilities, energy, materials, industrials, real estate, financials, health care, consumer discretionary, and consumer staples. 2NASDAQ Composite Index is a broad-based market index that includes more than 3700 stocks listed on the Nasdaq stock exchange. 3Dow Jones Industrial Average® is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. 4NYSE Arca Gold Miners Index (GDMNTR) is a modified market capitalization-weighted index comprised of publicly traded companies involved primarily in the mining for gold.
Any indices listed are unmanaged indices and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in a Fund. Certain indices may take into account withholding taxes. An index’s performance is not illustrative of a Fund’s performance. Indices are not securities in which investments can be made.
Investments in commodities can be very volatile and direct investment in these markets can be very risky, especially for inexperienced investors.
NYSE Arca Gold Miners Index is a service mark of ICE Data Indices, LLC or its affiliates (“ICE Data”) and has been licensed for use by Van Eck Associates Corporation (“VanEck”). VanEck products are not sponsored, endorsed, sold or promoted by ICE Data. ICE Data makes no representations or warranties regarding VanEck products or the ability of the NYSE Arca Gold Miners Index to track general stock market performance.
ICE DATA MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE NYSE ARCA GOLD MINERS INDEX OR ANY DATA INCLUDED THEREIN. IN NO EVENT SHALL ICE DATA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
The S&P 500® Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright © 2025 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spglobal.com/spdji/en/. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.
Gold investments are subject to the risks associated with concentrating its assets in the gold industry, which can be significantly affected by international economic, monetary and political developments. Investments in gold may decline in value due to developments specific to the gold industry. Foreign gold security investments involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, or political, economic or social instability. Gold investments are subject to risks associated with investments in U.S. and non-U.S. issuers, commodities and commodity-linked derivatives, commodities and commodity-linked derivatives tax, gold-mining industry, derivatives, emerging market securities, foreign currency transactions, foreign securities, other investment companies, management, market, non-diversification, operational, regulatory, small- and medium-capitalization companies and subsidiary risks.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.
© Van Eck Associates Corporation.
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Important Disclosures
All company, sector, and sub-industry weightings as of June 30, 2025, unless otherwise noted.
Please note that VanEck may offer investment products that invest in the asset class(es) or industries included in this communication.
This is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results.
Please note that the information herein represents the opinion of the author, but not necessarily those of VanEck, and this opinion may change at any time and from time to time. Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. Any graphs shown herein are for illustrative purposes only. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
Diversification does not assure a profit or protect against loss.
Nothing in this content should be considered a solicitation to buy or an offer to sell shares of any investment in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction, nor is it intended as investment, tax, financial, or legal advice. Investors should seek such professional advice for their particular situation and jurisdiction.
1S&P 500 Index is widely regarded as the best single gauge of large-cap U.S. equities. The index is a float-adjusted, market-cap-weighted index of 500 leading U.S. companies from across all market sectors including information technology, telecommunications services, utilities, energy, materials, industrials, real estate, financials, health care, consumer discretionary, and consumer staples. 2NASDAQ Composite Index is a broad-based market index that includes more than 3700 stocks listed on the Nasdaq stock exchange. 3Dow Jones Industrial Average® is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. 4NYSE Arca Gold Miners Index (GDMNTR) is a modified market capitalization-weighted index comprised of publicly traded companies involved primarily in the mining for gold.
Any indices listed are unmanaged indices and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in a Fund. Certain indices may take into account withholding taxes. An index’s performance is not illustrative of a Fund’s performance. Indices are not securities in which investments can be made.
Investments in commodities can be very volatile and direct investment in these markets can be very risky, especially for inexperienced investors.
NYSE Arca Gold Miners Index is a service mark of ICE Data Indices, LLC or its affiliates (“ICE Data”) and has been licensed for use by Van Eck Associates Corporation (“VanEck”). VanEck products are not sponsored, endorsed, sold or promoted by ICE Data. ICE Data makes no representations or warranties regarding VanEck products or the ability of the NYSE Arca Gold Miners Index to track general stock market performance.
ICE DATA MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE NYSE ARCA GOLD MINERS INDEX OR ANY DATA INCLUDED THEREIN. IN NO EVENT SHALL ICE DATA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
The S&P 500® Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright © 2025 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spglobal.com/spdji/en/. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.
Gold investments are subject to the risks associated with concentrating its assets in the gold industry, which can be significantly affected by international economic, monetary and political developments. Investments in gold may decline in value due to developments specific to the gold industry. Foreign gold security investments involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, or political, economic or social instability. Gold investments are subject to risks associated with investments in U.S. and non-U.S. issuers, commodities and commodity-linked derivatives, commodities and commodity-linked derivatives tax, gold-mining industry, derivatives, emerging market securities, foreign currency transactions, foreign securities, other investment companies, management, market, non-diversification, operational, regulatory, small- and medium-capitalization companies and subsidiary risks.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.
© Van Eck Associates Corporation.