Gold Sits Near $4,270. The Miners’ Fund Is Still 22% Below Its Peak, the Catch-Up Trade Hiding in Plain Sight

Gold Sits Near $4,270. The Miners’ Fund Is Still 22% Below Its Peak, the Catch-Up Trade Hiding in Plain Sight

David Beren

Wed, August 26, 2026 at 5:43 PM GMT+3 5 min read

Quick Read

• GDX sits 22% below its peak despite gold at record $4,270, while GDXJ's junior miners deliver the operational leverage the seniors are missing.

• GLDM tracks bullion at a lower cost than GDX, making it the cleaner choice for investors seeking a pure hedge over mining equity exposure.

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Gold trading near $4,270 should have been a coronation for VanEck Gold Miners ETF (NYSEARCA:GDX). Instead, GDX holders own a fund that has gained 76.34% over the past year, yet still sits roughly 22% below its 52-week high of $117.16. The gap between the metal and the miners is the core reason to own GDX, and that gap remains wide. A related VanEck product has historically closed it, and most GDX holders already know its name without owning it.

Why GDX Sits in So Many Portfolios

GDX is the default vehicle for gold-mining equity exposure. It holds the majors, with Newmont at 10.37%, Agnico Eagle at 10.12%, and Barrick at 6.01%, and the top 10 positions account for 56.30% of assets. Investors buy it because it turns a directional view on bullion into equity beta without picking a single miner. Fees are reasonable at 0.51%, and the fund carries a beta of 0.67 against the broader market, which is why it slots into diversification buckets. Those are the reasons GDX sits in so many portfolios.

The leverage assumption is where this fund falls short of expectations. In a normal gold cycle, miners should amplify the metal's move because incremental ounces flow straight to margin. Gold itself is up roughly 27% year over year, yet the miner fund is only 23.03% higher year to date, even after a sharp recent run that includes a 40.26% gain over the last month and an 18.63% jump in a single week. The senior-heavy roster is performing more like a large-cap equity index than a leveraged bet on bullion.

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Where the Senior-Miner Tilt Falls Short

Newmont, Barrick, and Agnico each have mature production profiles, dividend commitments, and hedging programs that weaken the pass-through effect of a higher gold price. That is why the miner fund trades at a P/E near 16, even with gold sitting at record levels. Earnings are catching up, but the major producers tend to reinvest, repurchase shares, and pay dividends rather than aggressively compound reserves. The result is a fund that acts more like a slow-moving proxy for the metal, which undermines the main reason investors buy miners in the first place: operational leverage.

How VanEck Junior Gold Miners ETF Differs

The concrete alternative is VanEck Junior Gold Miners ETF (NYSEARCA:GDXJ). Same issuer, same index family, different exposure. GDXJ holds small- and mid-cap producers and near-term developers whose earnings scale far more aggressively with each incremental dollar in the gold price. A miner producing 200,000 ounces at a $1,600 all-in cost sees a much larger percentage move in cash flow when gold pushes from $3,300 to $4,270 than a Newmont-sized operator with hedges, sustaining capex, and mature mines.

The mechanism really matters when you are looking at the catch-up trade specifically. When the major miner fund is 22% below its peak while gold sits at record highs, that gap tends to compress through the more sensitive end of the mining universe first, and that is exactly where the junior miner fund lives. The fees between them are close enough that they become a rounding difference relative to the underlying return spread that typically opens up in a late-cycle bullion move.

Tradeoffs Worth Naming

GDXJ is not a free upgrade. Junior miners carry single-project risk, financing risk, and larger drawdowns when gold reverses. The same operational leverage that helps on the way up hurts on the way down. Holders should also note the macro backdrop: the 10-year Treasury yield sits at 4.70%, and any sharp move higher there tends to pressure the entire mining complex, juniors first.

For investors who bought GDX as a hedge rather than a growth bet, GDXJ is not the closest match. A physical-gold vehicle such as iShares Gold Trust Micro (NYSEARCA:GLDM) removes operational risk entirely and tracks bullion at a lower expense ratio than GDX.

Tax Considerations Between the Two Funds

Inside a retirement account, shifting between these two funds carries no immediate tax consequences, so you can reposition freely. In a taxable account, the treatment is different. The major miner fund is up sharply, and selling the entire position would crystallize gains at ordinary short-term rates if you have held those shares for less than a year. Partial rotations, rather than full liquidations, are a common workaround. Another is directing new contributions into the fund you want to build up, rather than selling out of the one you already hold. That way, you stay inside the same theme without triggering an unnecessary tax bill.

What This Leaves on the Table

A catch-up move in gold miners remains possible, and GDX would participate. The question is whether owning the senior-tilted version captures enough of it. Investors who bought GDX for leverage to the gold price, not diversification into large-cap mining businesses, have a same-issuer, same-methodology alternative that historically does the job the majors are underdelivering on right now. Those who bought GDX as a portfolio hedge should look at physical instead. Both are more direct expressions of the reason to hold this exposure in the first place.

What Happens After A $1,000,000 Retirement?

How do you continue to grow a seven-figure portfolio in retirement? The last thing you want is to run out of money, you want your money to generate lasting income while you enjoy your life.

Learn seven strategies high net worth investors use with new report: The Seven Secrets of High Net Worth Investors from Fisher Investments. Get your guide here (sponsor)

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