Advisors and investors have certainly been keeping an eye on gold prices as of late, but what’s going on with the gold miners themselves may be equally as interesting.
- Gold miners performed well in August, given that the precious metal offered a potent use case during the debasement trade and a weakening dollar.
- Despite gold miners offering strong fundamentals at the moment, including high earnings expectations, valuations for these companies remain comparatively low.
- To take advantage of these low valuations, advisors and investors could use funds like the Sprott Active Gold & Silver Miners ETF (GBUG) and the Sprott Junior Gold Miners ETF (SGDJ).
Sprott’s recent quarterly gold miners report examined how the gold mining industry performed in Q3 2026. In the outlook, Kenny Zhu, director, research & investment strategy at Sprott Asset Management, examined the discrepancy between gold mining fundamentals and their current valuations.
As Zhu pointed out, the gold mining sector did quite well in August. Precious metals such as gold rallied during the month amid the debasement trade and a weaker dollar.
Zhu noted that short-term volatility within precious metals is still present, but viewed it as “cyclical swings within a broader structural trend.” Over the long term, gold will likely still be utilized as a hedge against risk factors within fiscal policy and monetary trends.
See More: Is the Uranium Industry Ready for the Nuclear Energy Wave?
According to Zhu, many of the portfolio use cases for gold bullion could extend to gold mining companies as well. Despite this, gold mining companies seem to be trading at valuations that do not match these compelling fundamentals. This is especially strange, given that Zhu noted that earnings expectations for gold miners have been high this year.
“Today’s gold mining industry bears little resemblance to the one investors experienced a decade ago,” Zhu said. “Greater capital discipline, stronger balance sheets and an increasingly constrained reserve-replacement pipeline have reshaped the industry’s fundamentals. These characteristics appear particularly compelling amid sustained gold demand from central bank buying, concerns about currency debasement and expanding fiscal deficits. If gold’s long-term monetary drivers remain intact, the disconnect between industry fundamentals and current valuations may become increasingly difficult to ignore.”
Sprott’s ETF library offers a few different ways for investors to gain access to the gold mining industry. For instance, one could opt for active management and a little diversification through the Sprott Active Gold & Silver Miners ETF (GBUG).
GBUG is an actively managed fund from Sprott that invests in both gold and silver miners. For those seeking diversification and the flexibility of active management, GBUG’s approach may resonate.
The Sprott Junior Gold Miners ETF (SGDJ), meanwhile, invests in smaller gold miners. This investment focus could prove attractive for advisors and investors seeking deep growth opportunities, especially amid the ongoing value discrepancy within the mining industry.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Content Hub.
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM, SGDJ, SLVR, GBUG, METL, and REXC
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.
Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.