Gold mining stocks have delivered one of the most explosive rallies in global markets, but after outperforming U.S. equities by a historic margin, investors are questioning whether the sector still offers upside or has finally priced in perfection.
As gold surged above $5,000 per ounce in late January and silver pushed past $110, mining equities extended a rally that began accelerating in mid-2025. The gains have been staggering.
VanEck Gold Miners ETF (NYSE:GDX), which tracks 55 largely North American producers, has climbed 187% over the past 12 months. Over the same period, the SPDR S&P 500 ETF Trust (NYSE:SPY) returned about 16%.
That gap puts gold miners on pace to outperform the broader market by more than 10 times.
Has the gold miners sector already gone too far, too fast — or is this rally still in its early chapters?
Chart: Gold Miners’ Historic Gap Versus S&P 500 (1-Year Performance Comparison)
Fundamentals Back The Mining Sector
Precious metals closed out 2025 in blockbuster fashion, with gold posting its strongest year since 1978 and silver its best since 1979. That momentum has carried into a powerful 2026 rally — a shift that Thomas Shipp, head of equity research at LPL, said has materially reshaped earnings power and investor expectations across the mining sector.
Gold, as measured by the SPDR Gold Shares (NYSE:GLD), is up more than 15% year to date, while silver — tracked by the iShares Silver Trust (NYSE:SLV) — has surged nearly 50% in under a month.
Rising metal prices continue to expand margins and unlock operating leverage across the sector.
According to LPL Financial, the trailing 12-month revenue growth for major precious metals miners reached about 26%, while operating margins climbed to roughly 37%, up from 16% a year earlier.
Returns on equity rose to about 13.5%, compared with roughly 2.5% last year. Earnings growth jumped to nearly 91%.
That performance explains the explosive stock moves.
Looking ahead, analyst expectations remain aggressive. Consensus forecasts call for revenue growth of roughly 30% in fiscal 2025, followed by another strong year in 2026.
For context, the so-called Magnificent Seven are projected to grow earnings by about 21% in 2025 and 19% in 2026.
Despite the parabolic price action, mining stocks are not trading at bubble-like multiples.
On forward estimates, the sector trades at a meaningful discount to the broader market, even after factoring in its recent gains.
The GDX ETF trades at an average 16.5 times its 2027 earnings, about four multiple points below the S&P 500’s 20x.
Technicals Flash Caution — Not a Top
From a technical perspective, the uptrend remains firmly intact. Mining stocks continue to trade within a steep rising channel that began forming in early 2025, supported by strong momentum and broad participation across the sector.
At the same time, signs of near-term exhaustion are emerging.
Nearly half of the index constituents now show a Relative Strength Index above 70, a common overbought threshold. The index trades roughly 57% above its 200-day moving average, close to levels that preceded sharp pullbacks in late 2025.
“Given this backdrop and the elevated risk of a potential pullback from these levels, we favor a tactical approach: using pullbacks within the channel as buying opportunities rather than chasing the current rally,” Shipp said.
Bottom Line
Gold miners did not climb on hype alone. Stronger margins, rising earnings power and improving cash flow drove the move, with higher precious metals prices acting as fuel.
Today’s prices assume gold and silver stay elevated into 2027. If that plays out, miners can keep beating the market. If it doesn’t, volatility could return fast.
For investors looking for leveraged exposure to precious metals amid geopolitical tension and ongoing monetary policy concerns, mining stocks still make sense.
From a technical view, though, the trade looks crowded, making patience, discipline and selectivity more important now.
Photo: Shutterstock
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