Major gold miners have reported their second-best quarterly results on record for the three months to June 2026, even as the price of gold suffered its worst quarter since 2013. The paradox highlights the leverage miners have built into their operations, and it has driven sector valuations to levels not seen in at least a decade.
Gold's Q2 tumble and miners' resilient profits
Gold fell 14.1% in Q2'26, part of a larger 26.3% drawdown from a late-January peak to mid-July. The decline was fuelled by Fed rate‑hike fears and a resurgent backward war trade. Yet the major gold miners that dominate the GDX VanEck Gold Miners ETF earned near-record profits. The disconnect has been striking: gold stocks fell only 17.8% in Q2, implying downside leverage of just 1.3 times gold's move, well below the historical 2–3 times typical for miners.
The resilience stems from the miners' own cost structures. With gold still trading well above their all-in sustaining costs, profits per ounce remained fat. The combination of lower share prices and strong earnings has compressed valuations, making the sector cheap by historical standards.
How the top 25 miners performed
The GDX ETF, which holds $28.0 billion in net assets, is the dominant benchmark for gold equities. Its top 25 component stocks account for roughly 80% of the fund's weighting and include super-majors (producing over 2 million ounces a year), majors (over 1 million ounces), and large mid‑tiers (over 300,000 ounces).
Analysis of these companies' Q2'26 operational and financial data shows that output, costs, revenues, earnings, operating cash flows, and cash treasuries all held up remarkably well. While some data fields were still being filled as of mid‑August, the preliminary picture confirms that the sector's profitability was second only to the record set in the previous quarter.
Gold miners' profits are inherently leveraged to the gold price because fixed costs do not rise proportionally when revenue falls. Even a 14% drop in gold still left most miners with healthy margins. The result is a sector that is producing strong cash flows at a time when its stocks are being sold off indiscriminately.
Key takeaways
- Major gold miners reported their second-best quarterly results ever in Q2'26, despite a 14.1% drop in the gold price.
- GDX fell only 17.8% in Q2, giving downside leverage of just 1.3x gold's decline, far below the typical 2–3x.
- Gold stocks' parallel selloff pushed sector valuations to their lowest levels in at least a decade, and possibly ever.
- Miners' near-record profits were driven by gold prices still well above production costs, cushioning the blow from the price drawdown.
Common questions
Why did gold miners earn near-record profits when gold fell?
Gold miners are leveraged plays on the metal price. Even a sharp drop from an extreme peak can leave prices well above their all-in sustaining costs, especially for low-cost producers. In Q2'26, the average gold price still allowed fat margins, and cost discipline helped preserve earnings.
What is the GDX ETF and why does it matter?
The GDX VanEck Gold Miners ETF is the oldest and largest gold‑miner ETF, launched in May 2006. With $28.0 billion in net assets, it is about 12 times larger than its nearest competitor. It is the benchmark for gold‑stock investors and its top 25 holdings represent the bulk of the sector's market capitalisation.
How do gold miners' production tiers work?
Gold miners are categorised by annual production: small juniors (under 300,000 ounces), mid‑tiers (300,000 to 1 million ounces), majors (over 1 million ounces), and super‑majors (over 2 million ounces). The largest two categories account for nearly half of GDX's weighting.
Conclusion
The Q2'26 earnings season for gold miners has revealed a sector that is generating exceptional profits at a time when its stocks are deeply out of favour. The combination of strong fundamentals and low valuations is a rare configuration. Investors tracking the sector can follow the live gold price to see how the underlying metal continues to influence miner profitability.