Gold mining stocks have delivered a stellar rally with some companies seeing gains nearing 200% year-to-date, yet a leading macro strategist believes the sector remains significantly undervalued and is poised for historic profit margins.

Gold Miners’ Valuation Shrinks Despite Stellar Rally

Otavio Costa, Macro Strategist at Crescat Capital, highlighted in a recent X post that despite the impressive surge in share prices, the sector’s Price-to-Earnings (P/E) ratios have actually “contracted, a sign that mining stocks are growing faster than share prices.

Costa's analysis, backed by a compelling chart comparing the Philadelphia Stock Exchange Gold and Silver Index's earnings per share (EPS) against its price, illustrates a dramatic divergence.

For those who think mining stocks are expensive:Despite their strong recent performance, P/E ratios have actually contracted, a sign that earnings are growing faster than share prices.Initially, these stocks were priced based on very conservative earnings estimates. And… pic.twitter.com/NFEZkS3d5l

— Otavio (Tavi) Costa (@TaviCosta) October 1, 2025

Gold Miners Set To Post ‘Highest Profit Margins’ In History

While prices have climbed steadily, EPS has soared, leading to a situation where the sector’s valuations appear remarkably cheap relative to its burgeoning profitability.

“Earnings per share for the Philadelphia Gold & Silver Index have more than ...