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The usually-overlooked gold stocks are having a good summer, consolidating near major secular highs. This strength has left the leading GDX gold-stock ETF’s technicals quite-bullish heading into this sector’s strong season. Gold stocks remain in a strong steep uptrend, a key moving average has held as support, their overboughtness has been moderating, and they’ve achieved multiple secular highs despite flat gold.
Technical analysis uses historical price data to predict probable near-future price trends. Since prices are determined by the collective buying and selling of all traders, prices effectively incorporate all information these traders have. When charted over time, prices reveal tradable trends with buy-low entries and sell-high exits. Technical analysis works because countless traders consider price charts before buying or selling.
Since launching way back in mid-May 2006, the GDX VanEck Gold Miners ETF has grown into the most-popular sector benchmark. Midweek its net assets totaled $15.2b, an order of magnitude larger than its next-biggest competitor. GDX is dominated by major gold miners producing over 1,000k ounces per year. There’s no other gold-stock metric more widely watched than GDX, which gauges sector performance for traders.
GDX is having a great 2025, soaring 52.7% year-to-date! That’s part of a much-larger 110.3% bull run from early October 2023 to late July 2025. Those big gold-stock gains were naturally fueled by gold’s mighty cyclical bull over this same span. Remarkably that rocketed 88.6% higher at best in mid-June without suffering a single 10%+ correction! Despite their gains, gold stocks have really underperformed gold.
Historically GDX tends to amplify material gold moves by 2x to 3x, which is necessary to compensate investors for gold stocks’ big additional risks. Found mostly on the operational, geological, and geopolitical fronts, all those are heaped on top of gold price trends. GDX has only leveraged this gold bull’s huge gains by 1.2x at best, far too low. So big catch-up rallying is overdue, which bullish GDX technicals portend.
Those are illuminated in this GDX chart of the past few years or so. This leading gold-stock ETF’s daily closes are rendered in blue, its 50-day and 200-day moving averages are shown in white and black, and its Bollinger bands are colored yellow. Despite traders largely ignoring gold stocks again, their technicals are quite-bullish all the way around. Gold stocks are poised to fly in gold’s next upside breakout coming soon.
GDX’s mounting bull run over the last couple years or so has come in two distinct phases. The initial uptrend from early October 2023 to late December 2024 had a fairly-modest upslope. Yet the major gold stocks still collectively soared 70.2% in 12.6 months, achieving a 4.2-year secular high in late October 2024. They weren’t even extremely-overbought then, a threshold currently starting at 1.30x GDX’s 200dma.
That’s based on a technical construct called the Relative GDX, calculated by dividing GDX’s daily closes by its 200dma. That renders all GDX price action in perfectly-comparable percentage terms, effectively flattening its 200dma to 1.00x. Charted over time, these rGDX multiples yield horizontal trading ranges. During the last five calendar years, the upper resistance zone for GDX relative to its 200dma ran up at 1.30x.
At that initial late-October interim high, GDX stretched to 1.288x its 200dma. That’s overbought, but not extremely so necessitating an imminent big-and-fast selloff. Yet the major gold stocks rolled over into one anyway, after Trump’s election win surprised traders. They aggressively bid up the US dollar on big-tariff fears, which ignited heavy gold-futures selling forcing gold into a larger pullback. GDX amplified that downside.
While gold merely sold off 8.0% into mid-November, GDX plunged 23.4% over 2.3 months making for 2.9x downside leverage in a bear-grade selloff! Because gold stocks are so darned volatile, often their bulls and bears are considered on gold’s timeframes rather than GDX’s. But like a phoenix rising from those technical ashes, that selloff birthed a steeper phase of gold stocks rallying in the second trend channel.
That included some major technical milestones too, starting with a Golden Cross buy signal in mid-February 2025. Those trigger when a price’s 50dma crosses back above its 200dma from below, usually heralding young major uplegs underway. Then in mid-March, GDX achieved a decisive 1%+ breakout to a dozen-year secular high. GDX wasn’t particularly overbought at all then, trading at just 1.186x its 200dma.
Within bull-market-upleg uptrends, prices often meander between lower support and upper resistance. GDX surged then retreated within this steeper trend channel multiple times this year. These typical sharp gold-stock rallies on gold strength quickly spawned greed, which was then bled off through slower selloffs and high consolidations. Major gold stocks achieved more big technical breakouts in this 2025 uptrend.
In mid-April GDX soared to a 12.5-year secular high of $51.91, which at 1.321x its 200dma briefly hit that 1.30x+ extremely-overbought territory. But gold stocks didn’t linger there, quickly falling back down to both their uptrend support and 50-day moving average. One of the key technical hallmarks of strong bull runs is 50dmas holding as major support. This chart shows GDX has bounced near it multiple times this year.
Soon major gold stocks surged again into early June, achieving a fresh 12.7-year secular high as summer dawned. Interestingly at 1.304x GDX’s 200dma, that was less overbought than the previous interim high despite GDX being a sizable 3.5% higher! The longer prices climb on balance, the more higher price levels normalize both technically and psychologically. 200dmas gradually catch up reflecting those new norms.
Entering summer 2025 so strong, GDX could’ve easily sold off again. Yet instead the major gold stocks spent these last couple months mostly drifting sideways. That included not only a few more bounces off GDX’s 50dma, but a couple more major secular highs in mid-June and late July. Just last week, GDX surged up to $54.48 which was its best close in fully 12.8 years! Gold-stock technicals have remained strong.
This is even more apparent considering gold, which has been consolidating high since soaring to crazy-overbought extremes in mid-April. Back then gold closed at an all-time record $3,421, when GDX had just hit $51.91. That has effectively proven the top of gold’s trading range since, with several breakout attempts failing. The primary one was in mid-June, when gold edged up 0.3% over mid-April levels to $3,431.
At major gold stocks’ usual 2x-to-3x leverage, GDX should’ve rallied under 1% at best on that. Yet during that same span, this leading gold-stock benchmark had surged 4.9% to $54.46! Gold tried again in late July, again 0.3% above mid-April’s peak. GDX rallied to 5.0% over its own at $54.48. This summer, for the most part gold stocks have proven quite strong relative to the metal overwhelmingly driving their profits!
These bullish GDX technicals are a great omen for gold-stock performance in coming months. Both gold and gold stocks are heading into their strong seasons including autumn, winter, and spring rallies. Last week I wrote a whole essay exploring this current autumn rally. Typically it is fueled by outsized Indian gold demand, initially post-harvest buying then later big jewelry buying for India’s famous wedding season.
Midweek after a hawkish Fed chair, gold fell to just $1 above its late-June summer-doldrums low. In last week’s essay I laid out the case for a 10% gold autumn rally this year, driven by Indian demand combined with big buying from American stock investors and American gold-futures speculators. The former still have near-zero gold portfolio allocations, while the latter still have big room to flood into gold-futures long contracts.
With a 10% gold autumn rally, the major gold stocks should amplify that by the usual 2x to 3x powering up 20% to 30% by late September. Starting from GDX’s own summer-doldrums low of $50.73 in late June, that implies surging between $61 to $66! Those would be some excellent gains over a few months, well worth chasing. But I wouldn’t have written this essay if all GDX had going for it today was these bullish technicals.
While technical analysis works and is effective since so many traders base buying and selling decisions off price charts, it is somewhat shallow. Technicals often look strong right after major surges to major highs that soon prove unsustainable, shortly followed by major selloffs! The odds of continuing rallying from highs are much greater if underlying fundamentals also justify buying. That’s certainly true in gold stocks.
The gold miners are now reporting their Q2’25 results, which include epic record earnings mostly driven by these high prevailing gold prices. Five weeks ago in late June well before any reporting, I explained why in an essay on gold miners stacking records. Gold-mining costs rise way more slowly than this mighty cyclical gold bull. That means higher gold prices are directly amplified in much-bigger mining earnings.
Based on their recent-quarters all-in sustaining costs and guidances, I estimated the top 25 GDX stocks’ implied unit profits in Q2’25 would soar about 74% year-over-year! That would be awesome by itself, but it’s actually the latest huge jump in a long streak. During the last seven reported quarters ending in Q1’25, the GDX top 25’s implied unit earnings rocketed up 87%, 47%, 31%, 84%, 74%, 78%, and 90% YoY!
The gold miners’ earnings seasons run from about four-to-six weeks after quarter-ends, and this latest one is now underway. Over the next couple weeks, the great majority of gold miners will report fantastic results. That will increasingly attract professional fund investors, who generally still have little capital allocated in gold miners. They need good fundamental reasons to buy stocks, not just prices at secular highs.
And if they haven’t been following gold stocks closely, Q2’s blowout windfall profits are going to be a big surprise. Last Friday was a great case in point. After the prior close, the world’s largest gold miner and GDX’s biggest component reported its Q2 results. As a hardened veteran gold-stock trader over the past quarter-century, I wasn’t impressed. Newmont has long struggled with production growth and mining costs.
Last quarter Newmont mined 1,478k ounces of gold, which fell 8.0% YoY. And its all-in sustaining costs remained high relative to most peers, climbing 2.0% to $1,593 per ounce. Generally-growing output and stable lower mining costs are prized above everything else by experienced gold-stock investors. Newmont didn’t deliver on either, like usual. This behemoth has long proven sector deadweight retarding GDX upside.
Newmont released these Q2 results after last Thursday’s close, and last Friday gold was weak falling 1.0%. That extended its three-day selloff to 2.7% after its latest high-consolidation breakout attempt failed. So as leveraged plays on gold, gold stocks were going to be under pressure. With a weak sector tape, Newmont’s stock shouldn’t have done well. Yet NEM still blasted a massive 6.9% higher on Q2 results!
That was such a huge surge it dragged up GDX 1.2% on a day it should’ve been down 2% to 3%. Why did this happen? Professional fund investors generally don’t follow gold stocks, and Newmont’s results surprised them. It is the only gold miner included in the S&P 500. They were impressed by Newmont’s adjusted earnings per share nearly doubling soaring 98.6% YoY to $1.43, crushing Wall Street’s estimates of $1.04!
If Newmont with its endless problems and perpetually-shrinking output excluding expensive mergers can achieve this, imagine how awesome better gold miners’ Q2 results will prove. We’ve long specialized in trading smaller fundamentally-superior mid-tier and junior gold miners. They are much better able to consistently grow their production from smaller bases, often at lower more-profitable mining costs than majors.
For comparison consider mid-tier gold miner New Gold, which is a GDX component that just reported its Q2 results Monday. Its Q2 production climbed a good 14.6% YoY to 78.6k ounces of gold, while its all-in sustaining costs edged up 0.9% to $1,393 per ounce. Its adjusted earnings per share skyrocketed 450% YoY to $0.11! New Gold reaffirmed 2025 guidance at a 345k-ounce midpoint, which would be 15.7%-YoY growth.
And its AISCs forecast this year are projected at just $1,075, which would be down 13.2% YoY. Contrast all this with Newmont’s Q2 results and 2025 guidance. Q2 output again fell 8.0% YoY, while AISCs were far higher at $1,593. Newmont’s 2025 midpoint forecasts imply full-year production falling another 13.9% YoY while its AISCs climb 7.5% YoY to a much-higher $1,630 per ounce! Newmont terribly underperforms.
So if its stock can surge in a down sector tape on mostly-mediocre Q2 results, the better mid-tiers’ and juniors’ blowout Q2 earnings should fuel big upside. Epic record quarterly results drive wider awareness and interest among traders, increasing their capital inflows pushing gold stocks higher. And with smaller market capitalizations, mid-tiers and juniors can soar far easier than majors with vastly-larger market caps.
Last year was a good example of this. GDX performed dreadfully in 2024, only climbing 9.4% in a year where gold soared 27.2%. Newmont’s poor quarterly results were a big contributor, as its stock plunged 10.1% last year dragging down GDX! Newmont’s Q3’24 results in particular reported in late October were a disaster, with AISCs coming in way above guidance actually crashing its stock 14.7% in a single trading day!
Avoiding deadweight majors and trading fundamentally-superior mid-tiers and juniors results in far-better gains. Between our two subscription newsletters, we realized 84 mostly-gold-stock trades in 2024. Their average annualized gains including all losers was +43.1%, almost 5x better than GDX’s year! So doing your gold-stock homework or closely following someone who does really pays big compared to settling for GDX.
Further buttressing these bullish GDX technicals, gold stocks remain very undervalued relative to gold. I wrote another essay a couple weeks ago digging deeply into that. Compared to the metal driving their massive profits growth, gold-stock prices actually stalled out over a year ago in mid-July 2024! They still have vast rallying left to do merely to reflect prevailing gold prices, let alone where gold is ultimately heading.
Again GDX’s entire bull run is 110.3% at best since early October 2023, during a mighty 88.6% cyclical bull in gold. That makes for dismal 1.2x leverage so far. At GDX’s historical range of 2x to 3x, the major gold stocks would’ve soared 177% to 266% by now! During gold’s last 40%+ monster upleg cresting in August 2020, GDX skyrocketed 134.1% for fantastic 3.4x upside leverage. Gold stocks are overdue to outperform.
The bottom line is GDX’s technicals are quite-bullish. The gold stocks have not only weathered gold’s high consolidation this summer, but achieved major secular highs way outperforming their metal. This year they’ve powered higher in a well-defined steeper uptrend with key 50dma support. And despite hitting major new highs periodically, gold-stock overboughtness is moderating as GDX’s 200dma catches up.
This great price action alone is very constructive heading into gold’s seasonal autumn rally. But these bullish GDX technicals are buttressed by fantastic fundamentals. The gold miners are now reporting their best quarterly results ever by far, extending a long streak of epic record earnings growth. That will help attract in more fund investors, with big capital inflows catapulting gold stocks higher to normalize with their metal.
(By Adam Hamilton)
