Mid-Week Macro (12/3/2025)
Mid-Week Macro
Let’s review. On March 1st 2024, gold was $2082, silver $23.13, and the HUI 204. The HUI rose 239% and reached a high of 693 on Oct 16th. Then, the HUI corrected 22% to 552 on November 4th. Then, the HUI retraced to 688 on December 1st. Today, it is at 661.
Year-to-date, gold is up 60% to $4202. Silver is up 101% to $58.45. The HUI is up 101% to 661. GDXJ is up 150%. SILJ is up 160%. Very impressive performance.
Since March 1st 2024, gold took off like a rocket. It took some time, but the HUI and silver joined the party in August. On August 1st, 2025, gold was at $3363, the HUI was 424, and silver was $37.34. Since then, they have all been ripping higher. August was when the bell rang. Silver got above $40 and never looked back. With silver moving higher, the HUI ripped to almost 700.
What’s important to understand is that the silver miners have had terrible FCF margins for years. Those margins didn’t really improve until we got to August. At $37 silver, the average FCF margin reached 27%. That is healthy, which has been rare for the silver miners. Since then, it has just gotten better. Today, the average FCF margin for silver miners is around 50% at $58 silver. That is huge.
The current FCF margins for both gold and silver miners is very high. Conversely, their valuations are not. The average FCF multiple is 7 for gold miners and 9 for silver miners (excluding small producers). These multiples are likely to more than double before this bull market is over. Thus, these producers are valued at 50% off (or more) their future valuations. Why? Because Wall Street is not interested. Newmont is trading at a 9 FCF multiple, but that will change. I expect Newmont to reach the 20s when gold gets to $6000.
These massive moves in gold/silver/miners since March 2024 have made the technical charts look extremely juicy. The TA Gurus think we are heading higher, and I agree. However, expect a significant correction when the S&P 500 crashes. That event is coming, and I doubt gold, silver, and the miners can fade that event easily. The miners corrected around 25% in October, and the next one could be even deeper. However, the retracement could be just as quick.
I find it hard to time the zig zags as I have to sell..some miner X...wait and then buy or buy back..
In the mean time it will make a Tax event, that needs to be put aside..= less capital to deploy....
and tax loss selling...hard when you don´t have any..LOOSERS....)))
On Newmont, Don is saying it has a FCF multiple of 9x. Finviz has it at 16. If I go to Yahoo Finance, the TTM show $6.1 billion, the last quarter at $1.571 billion, or about $6.4 billion annualized. At a market cap of $98 billion, having a hard time seeing where it's a 9X multiple. Likely, I'm missing something.