What August's Gold Rally Means for Gold Mining Equities

September 09, 2026

Read Time 2 MIN

Imaru Casanova

Portfolio Manager, Gold and Precious Metals

August was gold’s best month since January as gold surged 9.67%, driven by geopolitical hopes, Treasury buyback plans, and central bank demand. Gold miners dramatically outperformed with a 32.94% gain.

Key Takeaways

Gold miners can benefit from expanding margins and cash flow when gold prices rise.
The sector is generating strong free cash flow while valuations remain discounted.
Mining companies build value over years and full market cycles, making an informed, patient approach important.

August Gold Market Review

Gold had a strong August, gaining 9.67% for the month and closing at $4,437.38 on August 31 — its best monthly performance since January. The month saw two distinct legs higher: an initial jump in early August driven by hopes around a resolution in the Strait of Hormuz and the implications for the Fed's policy path, and a second move following Treasury Secretary Bessent's August 19 announcement of plans to significantly expand buybacks of longer-dated bonds, which pushed longer-dated Treasury yields lower and weighed on the U.S. dollar, providing a tailwind for gold. The broader backdrop remained supportive as well, with news that the People's Bank of China extended its gold buying streak to a 21st consecutive month in July, reinforcing the structural central bank demand story, while growing market concern over U.S. federal debt hitting a record $40 trillion kept the debasement theme in focus.

Gold reached a monthly high of $4,657 on August 25 before giving up gains, as Fed Chair Kevin Warsh's remarks at the Jackson Hole symposium — where he signaled the Fed would "have work to do" if inflation wasn't clearly moving back toward its 2% target — sent rate hike expectations for the September 16 FOMC meeting sharply higher, pressuring gold. Gold mining equities participated in the August rally, with the MarketVector Global Gold Miners Index (MVGDXTR)¹ up 32.94% for the month, significantly outperforming the metal as leverage kicked in.

We recently shared our views on what we think are some of the steps gold mining companies can take to help put gold equities on the radar of global investors — how to make the case compelling enough, and consistent enough, that the broader investment community starts to see what we see: That owning the miners is worth it despite all the additional complexity and risk.

At the heart of it, we were talking about the need to build trust in gold equities as the right vehicle to get exposure to the gold market. Many of these companies have already done, and continue to do, the hard work of rebuilding that trust. The question now is whether investors have done the work to understand this complex and demanding sector.

Investing in Gold Mining Equities: Risks, Rewards and Long-Term Value

Gold mining equities are not the same as owning gold — they are leveraged, operationally complex businesses where rising gold prices can amplify returns significantly, but where company-specific risks, jurisdiction, management quality, and cost structure all play a critical role in outcomes. For investors considering exposure to this sector, the principles that separate informed investors from the rest go well beyond watching the gold price. In What Investors Should Know Before Investing in Gold Mining Equities, Ima explores the key principles that we believe are often overlooked or misunderstood by investors approaching this sector.

The Sector Has Done The Work — And Valuations Remain Discounted

August's rally offered a glimpse of what this sector can do, but the longer-term case for gold mining equities rests on something more durable. The sector is, in our view, in the strongest shape ever. By most valuation metrics — price to cash flow, price to net asset value, relative to their own history, relative to gold and relative to the broader equity market — gold mining equities remain deeply discounted at a moment when the underlying businesses are generating some of the strongest levels of free cash flow in their histories.

There's a reasonable case that the market is still pricing these companies based on who they were rather than who they are. That may persist for a while, but we don't think it will persist indefinitely. At some point, we expect the valuation gap to narrow. For investors willing to engage with it thoughtfully, the gold mining sector looks as compelling as ever.

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Important Disclosures

All company, sector, and sub-industry weightings as of August 31, 2026, 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.

¹ MarketVector Global Gold Miners Index (MVGDXTR) tracks the overall performance of companies involved in the gold mining industry.

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.

MarketVector Global Gold Miners Index is the exclusive property of MarketVector Indexes GmbH which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MarketVector Indexes GmbH, Solactive AG has no obligation to point out errors in the Index to third parties.

Investments in commodities can be very volatile and direct investment in these markets can be very risky, especially for inexperienced investors.

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.

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Important Disclosures

All company, sector, and sub-industry weightings as of August 31, 2026, unless otherwise noted.

Please note that VanEck may offer investment products that invest in the asset class(es) or industries included in this communication.

Diversification does not assure a profit or protect against loss.

¹ MarketVector Global Gold Miners Index (MVGDXTR) tracks the overall performance of companies involved in the gold mining industry.

Investments in commodities can be very volatile and direct investment in these markets can be very risky, especially for inexperienced investors.

666 Third Avenue | New York, NY 10017