Gold Mining Stocks Remain Undervalued Despite Stellar Rally: Expert Predicts Highest Profit Margins in History

Gold mining stocks have surged 200% YTD but remain undervalued, according to Macro Strategist Otavio Costa. Despite the impressive rally, the sector's P/E ratios have contracted, indicating growing profitability. Costa predicts that gold miners could post their highest profit margins in history if gold prices hold steady or move higher. Gold prices are nearing $3,900 per ounce, driven by macroeconomic concerns such as monetary uncertainty and fiscal strain.

Gold mining stocks have delivered an impressive rally, with some companies seeing gains nearing 200% year-to-date (YTD). However, Otavio Costa, Macro Strategist at Crescat Capital, believes the sector remains significantly undervalued and poised for unprecedented profit margins Gold Miners Remain Undervalued Despite Stellar Rally: Expert Says They Are Set To Post 'Highest Profit Margins' In History^[1].

Despite the robust share price surge, the sector's Price-to-Earnings (P/E) ratios have contracted, indicating that mining stocks are growing faster than share prices. Costa's analysis, backed by a compelling chart comparing the Philadelphia Stock Exchange Gold and Silver Index's earnings per share (EPS) against its price, illustrates a dramatic divergence Gold Miners Remain Undervalued Despite Stellar Rally: Expert Says They Are Set To Post 'Highest Profit Margins' In History^[1].

Gold Miners Set To Post ‘Highest Profit Margins’ In History

While gold prices have climbed steadily, EPS has soared, leading to a situation where the sector’s valuations appear remarkably cheap relative to its burgeoning profitability. “Earnings per share for the Philadelphia Gold & Silver Index have more than quadrupled over the past five years,” Costa noted Gold Miners Remain Undervalued Despite Stellar Rally: Expert Says They Are Set To Post 'Highest Profit Margins' In History^[1].

If gold prices hold steady or move higher, these companies could post some of the highest profit margins in the industry's history, according to Costa. This optimistic outlook comes amidst a robust surge in gold prices, which are currently nearing the $3,900 per ounce mark, having risen 45.95% over the last year Gold Miners Remain Undervalued Despite Stellar Rally: Expert Says They Are Set To Post 'Highest Profit Margins' In History^[1].

Eugenia Mykuliak, Founder & Executive Director of B2PRIME Group, weighed in on the broader macroeconomic landscape. “At $3,900 per ounce, gold's surge has little to do with the shutdown itself. Instead, it reflects deeper anxieties about the Federal Reserve's ability to navigate its monetary policy dilemma,” Mykuliak explained Gold Miners Remain Undervalued Despite Stellar Rally: Expert Says They Are Set To Post 'Highest Profit Margins' In History^[1].

The economic narrative is being shaped by structural forces — monetary uncertainty, fiscal strain, and global risk appetite. These underlying factors suggest that gold’s ascent is driven by sustained macro concerns rather than transient headlines, providing a solid foundation for continued strength in the precious metal Gold Miners Remain Undervalued Despite Stellar Rally: Expert Says They Are Set To Post 'Highest Profit Margins' In History^[1].

This sustained high gold price environment is precisely what fuels Costa’s projection for unprecedented profit margins among gold miners, making their current “undervalued” status particularly noteworthy for investors Gold Miners Remain Undervalued Despite Stellar Rally: Expert Says They Are Set To Post 'Highest Profit Margins' In History^[1].

Price Action

Here’s a list of a few gold miners and gold miner tracking exchange-traded funds that investors could consider:

| Stocks YTD Performance | One Year Performance |
|---|---|
| Harmony Gold Mining Company Ltd. (NYSE:HMY) | 117.45% | 74.29% |
| Perpetua Resources Corp. (NASDAQ:PPTA) | 87.06% | 125.66% |
| Eldorado Gold Corp. (NYSE:EGO) | 87.70% | 67.04% |
| Sandstorm Gold Ltd. (NYSE:SAND) | 118.56% | 106.97% |
| Iamgold Corp. (NYSE:IAG) | 133.87% | 145.30% |
| Skeena Resources Ltd. (NYSE:SKE) | 96.16% | 114.22% |
| Kinross Gold Corp. (NYSE:KGC) | 157.59% | 160.49% |
| Newmont Corporation (NYSE:NEM) | 124.00% | 59.17% |
| Royal Gold Inc. (NASDAQ:RGLD) | 48.72% | 40.99% |
| Anglogold Ashanti PLC (NYSE:AU) | 194.45% | 165.94% |

Gold Miner ETFs YTD Performance

| ETFs YTD Performance |
|---|
| VanEck Gold Miners ETF (NYSE:GDX) | 118.25% |
| VanEck Junior Gold Miners ETF (NYSE:GDXJ) | 122.84% |

Gold Spot US Dollar rose 0.52% to hover around $3,885.93 per ounce. Its last record high stood at $3,895.33 per ounce. The prices have risen 23.79% over the last six months and 45.95% over the last year Gold Miners Remain Undervalued Despite Stellar Rally: Expert Says They Are Set To Post 'Highest Profit Margins' In History^[1].

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Thursday. The SPY was up 0.28% at $670.29, while the QQQ advanced 0.57% to $606.66, according to Benzinga Pro data Gold Miners Remain Undervalued Despite Stellar Rally: Expert Says They Are Set To Post 'Highest Profit Margins' In History^[1].