It’s been an incredible year for precious metals investors. Gold bugs – much maligned – are finally seeing the moves they’ve long hoped for and expected with gold up nearly 40% over the last year. Obviously the gold miners – the companies that mine the precious metal – are outperforming as well given that they are levered to the price of gold.
If you invest in the precious metals miners via the Van Eck Gold Miners ETF (GDX), you own a big position in the largest gold miner Newmont (NEM). More than 14% of GDX is invested in NEM. NEM reports 3Q24 earnings Wednesday afternoon. What should we expect?
In the first half of 2024, NEM’s Revenue, Adjusted EBITDA and Adjusted EPS were up 57%, 93% and 74%, respectively. Those are massive increases. With gold prices continuing to rise throughout the 3Q, I expect more of the same on Wednesday afternoon.
It’s possible that NEM and GDX could correct after such a big run up if investors have some quibbles with earnings. But with the Fed pivoting to loosening monetary policy with their 50 basis point cut last month, gold prices are rising on a solid fundamental foundation. Any correction would be a buying opportunity IMO. Long a laughingstock, you can’t hate on the gold bugs anymore. Giddyup!
Disclosure: Top Gun is long shares of GDX.
