Gold Miners Outpace Bullion as Prices Rebound
Gold miners are outpacing bullion again as a sharp rebound in gold prices lifts profit margins at producers such as Newmont and Agnico Eagle, underscoring why the VanEck Gold Miners ETF can move far more than the metal itself.
The exchange-traded fund, which owns gold producers rather than physical bullion, has surged 126.1% in 2025 — more than double the 45.7% gain in a classic gold ETF — as higher realized gold prices flow through to miners’ earnings. That operating leverage is the whole appeal of the product, but it also works in reverse, leaving the fund far more volatile than an ETF that simply tracks bullion.
Gold prices have since corrected from an early-2026 peak near $5,600 an ounce to roughly $4,000 to $4,400, then stabilized again around $4,390, a level that is still rich enough to support strong margins for the biggest producers. Physical gold remains the safer bet for investors seeking direct metal exposure, but miners offer a second layer of upside through dividends and buybacks when prices rise.
The move is showing up in the sector’s largest holdings. Newmont, the fund’s top position at 10.61%, reported second-quarter 2026 production of 1.3 million ounces at an average realized gold price of $4,414 an ounce and net income of $2.2 billion, while returning $1.9 billion to shareholders. Agnico Eagle Mines, the second-largest holding at 10.14%, posted second-quarter production of about 856,000 ounces at a realized price of $4,483 an ounce, with net income of $1.6 billion and $625 million returned to shareholders.
That earnings power has helped explain why large miners are still trading on relatively modest valuations despite the rally. Newmont and Barrick Mining are both changing hands at below 10 times earnings, even as the VanEck fund’s holdings remain highly concentrated, with its top 10 positions accounting for 58.5% of assets.
The sector’s latest pullback also shows the flip side for investors. The ETF’s 12-month drawdown reached 37.1%, and its five-year maximum loss stands at 39.2%, far steeper than physical gold. Technical readings on the fund and its largest miners have cooled from earlier overbought levels, with the 50-day moving averages still below recent highs and RSI readings well off their peaks, suggesting the group is no longer in the same overheated condition seen earlier this year.
For investors, the story is straightforward: when gold rises, miners can amplify the move; when gold falls, they can give back gains just as fast. With gold still elevated and miners flush with cash, the VanEck Gold Miners ETF remains a high-beta way to play the metal — but one that depends heavily on bullion staying near record levels and margins holding up against rising costs.
| Entity | Gains | Losses |
|---|---|---|
| Gold miners | ▲Wider margins, stronger cash flow | ▼Higher volatility if gold slips |
| VanEck Gold Miners ETF | ▲Outperforms bullion in gold rallies | ▼Larger drawdowns than physical gold |
| Newmont, Agnico Eagle | ▲Bigger profits, buybacks, dividends | ▼Cost inflation can trim upside |
| Physical gold holders | ▲Direct exposure, lower volatility | ▼Miss out on operating leverage |