GoldNuggets — Sharpe, AUM, Miners

Mar 03, 2025

GoldNuggets is our free publication at the

Monthly Gold Market Chartbook

. It contains "nuggets" of Charts & Research that come across our desk on gold/macro which we think might be interesting and useful for investors.

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Jason Goepfert of Sentimentrader cautions on gold: “the 1-year Sharpe ratio for gold has just surpassed 1.6, ranking in the top 1% of all days since 1975. Gold tended to suffer poor intermediate returns the few other times its Sharpe ratio climbed this high.“ (source)
I’d also point out, as shown in the monthly pack, seasonality takes a choppy-to-bearish tone in March-May, valuations are becoming expensive, and sentiment/positioning are a little overbought. So we could be due a period of volatility and consolidation before the next wave higher.

Aggregated assets under management (AUM) in US listed Gold ETFs exceeded $150 billion, a new all-time high.
That said, the majority of the growth in Gold ETF AUM has been price driven (e.g. chart 25 in the Gold Market Chartbook shows total gold holdings of ETFs has been rangebound and is still down about -25% off the 2020 highs).

Tavi Costa of Crescat Capital implores: “(gold) mining equities continue to strengthen fundamentally, and in my view, this progress will inevitably be reflected in their share prices… Gold miners have just recorded their strongest quarterly revenue growth in 15 years.“ (source)
Yep, as gold stays stronger for longer, gold miners become more attractive.

Garrett Goggin of Golden Portfolio points out: “GDX shares outstanding declined 30% while Gold rose 30%. Retail hates Gold stocks. All time high Gold stock profits. All time low Gold stock valuation based on FCF.“ (source)
I’ve seen this in the ETF flows and implied investor allocations to miners too — retail just doesn’t want a bar of it. Gold miners are unloved, undervalued, and are undergoing underappreciated improvement in fundamentals.