Gold miners crush the S&P 500 by 80 percentage points and still look cheap

The VanEck Gold Miners ETF (GDX) delivered a 108% return over the trailing year through April 8, 2026, outperforming the S&P 500 by more than 80 percentage points. Despite this extraordinary run, mining stocks remain historically cheap relative to gold prices. GDX's 332.9% appreciation from October 2023 through January 2026 represented only 1.7x leverage to gold's 196.4% gain, well below the traditional 2x to 3x leverage ratio, suggesting significant catch up potential.

Profit Margins Are Staggering: With gold averaging $4,873 per ounce in Q1 2026 and the industry's all in sustaining cost (AISC) at approximately $1,788 per ounce, top miners are operating at gross margins exceeding $3,000 per ounce. This represents a 63% margin, the widest in gold mining history.

Agnico Eagle stands out with the lowest AISC among major miners at just $1,475 per ounce, giving it a margin of over $3,300 per ounce at current gold prices. Revenue growth was 41.9% quarter over quarter. Zacks rates it a Strong Buy (Rank #1). 

Newmont designated 2026 as a "trough year" with production guidance lowered to 5.3 million ounces (a 10.2% decline), yet the company generated $9.5 billion in free cash flow and carries $8.24 billion in total cash.

Barrick trades at a forward P/E of just 12.23 with a 3.5% to 4.0% dividend yield, offering income investors a precious metals play with yield.

Direct Quotes:

• Seeking Alpha analysis noted GDX outperformed the S&P 500 by "more than 80 percentage points" over the trailing year.
• Janus Henderson: "Markets continue to underestimate the scale and durability of Europe's defense spending cycle," with similar underappreciation in gold miner valuations.

Gold Angle: Retirement investors who feel they "missed" gold at $4,750 should look at mining stocks. Barrick at a 12x forward P/E with a 3.5% dividend yield is objectively cheaper than the S&P 500 at over 20x earnings with a 1.3% yield. Mining stocks offer leveraged upside to gold prices, dividend income, and exposure to the best performing asset class of the decade. Inside an IRA, gold mining ETFs and individual miners offer a way to benefit from rising precious metals prices with the tax advantages of a retirement account.