Dear Fellow Investor,
There's a gap forming in the gold market that I haven't seen in 20 years.
And if you own gold — or even if you're just watching from the sidelines — this is something you need to understand before the end of this month.
Here's what I mean.
The Price of Gold vs. the Price of the Miners
Gold is trading near $4,000 an ounce.
At that price, gold mining companies should be the most profitable businesses on the planet.
And they are.
The largest gold miners just came off a quarter where revenue surged 43%.
Net income jumped 137%.
Free cash flow hit levels that would make most tech CEOs jealous.
So here's the question:
Why are these stocks trading at a forward price-to-earnings ratio of 7.5?
To put that in perspective — the S&P 500 trades at roughly 21x forward earnings.
Nvidia trades at over 30x.
Tesla, over 60x.
The gold miners producing record profits?
Under 8.
This week, Bank of America published a note I wanted to share with you.
Their exact words: "Best valuations in 20 years."
They weren't talking about some obscure corner of the market.
They were talking about the companies pulling the most valuable metal on Earth out of the ground at record margins — and being completely ignored by the investing public.
Why the Gap Exists
The answer is painfully simple.
In the first half of this year, North American gold ETFs saw $7.7 billion in outflows.
That's the worst since 2013.
Retail investors have been dumping gold-related assets all year long — rotating into AI stocks, semiconductor plays, anything with "artificial intelligence" in the description.
Meanwhile, one buyer has been doing the exact opposite.
China's central bank purchased 15 tonnes of gold in June alone — its 21st consecutive month of buying.
But The People's Bank of China isn't buying gold ETFs.
They're buying physical bars and storing them in vaults.
When the world's second-largest economy has been quietly hoarding gold for nearly two years straight, they're not making a trade.
They're making a bet.
And right now, the crowd is on the other side of that bet.
What Happens Next
I've been studying gold cycles for 30 years. And there's a pattern that repeats every time the gap between gold prices and miner valuations gets this wide:
Earnings close the gap.
Not opinions. Not analyst upgrades. Earnings.
When gold miners report revenue that's up 28%… earnings per share up 50%… operating margins that rival the best companies in America…
The market has no choice but to reprice.
And the next wave of gold miner earnings starts July 29th — ten days from now.
One miner in particular stands out.
Revenue over the last twelve months:
Nearly $8 billion — up 43% year over year.
Net income: $2.87 billion, up 137%.
A forward PE under 8.
Eight different analysts covering the stock with an average price target 59% above where it trades today.
And BofA — the same firm that just called this the "best valuation in 20 years" — rates it a BUY.
The Bigger Picture
I want to be clear about something.
This isn't just a gold story. It's a market story.
When 82% of fund managers say the same trade — long semiconductors — is the "most crowded" position in global markets…
When margin debt is sitting at $1.42 trillion, levels that have preceded every major correction in modern history…
When bankruptcies are up 28% year over year and South Korea’s tech-driven stock market drops so fast it triggers a circuit breaker…
The question isn't whether this market is going to rotate. It's where it rotates to.
History is unambiguous.
In periods of geopolitical stress, rising oil prices, and crowded equity positioning, gold miners don't just hold up.
They lead.
The last time miner valuations were this disconnected from gold prices — 2006 — the whole gold mining index rallied over 200% in the following 18 months.
I'm not guaranteeing that happens again. But I am saying the setup is here. And earnings are ten days away.
What I'm Doing About It
I've just published a full briefing on the gold miner I believe is best positioned to benefit from this 20-year valuation reset — including the company name, the ticker symbol, and the specific catalysts I'm watching between now and earnings day.
BofA doesn't throw around phrases like "best valuation in 20 years" casually. And when the gap between price and value is this wide, it doesn't stay wide for long.
“The Buck Stops Here,”
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Written by Dylan Jovine