Gold Miners Enjoy Record Margins Amid Soaring Prices

Gold producers are currently operating with some of the highest margins seen in over a decade, according to a recent chart shared by Tavi Costa, Partner and Macro Strategist at Crescat Capital. In a tweet published, Costa described the current environment as the “Golden Age of Mining,” noting that many mining stocks remain significantly undervalued relative to bullion prices.

Costa’s chart, based on Bloomberg data, compares gold spot prices with the median All-In Sustaining Cost (AISC) across the top 50 publicly traded mining companies in the U.S. and Canada. As of July 29, 2025, gold prices have reached $3,303 per ounce, while the median AISC stands at $1,533/oz, yielding a production margin of approximately 116%. This marks one of the widest profit spreads on record.

Gold has surged more than 35% over the past year, buoyed by persistent macroeconomic uncertainty, global central bank buying, and heightened demand for safe-haven assets amid geopolitical tensions. According to data from the London Bullion Market Association (LBMA), spot gold was trading at $3,306.45/oz as of July 30, 2025.

In contrast, mining costs have remained relatively stable, with AISC metrics hovering around $1,500 for the past 12 months. The decoupling of input costs from the spot price has created record profitability for producers, yet many gold mining equities have failed to follow suit.

Despite gold’s historic rally, share prices of many gold producers continue to lag. The NYSE Arca Gold BUGS Index (HUI), a benchmark for gold mining companies, is up just 15% year-to-date, underperforming the metal itself.

"Equity valuations have not kept pace with the underlying commodity," said Sprott Asset Management CEO John Ciampaglia in a recent interview with Kitco News. "This disconnect offers a potentially attractive entry point for investors looking at the sector."

According to analysts at Bank of America, gold equities historically tend to outperform during the later stages of a bull market in precious metals, suggesting that if gold holds above $3,000, a re-rating in mining stocks could soon follow.

The last time gold experienced a similarly dramatic price movement was in 2011, when it briefly touched $1,920/oz before entering a prolonged correction. Meanwhile, silver peaked at just under $50/oz that same year, according to historical data from the LBMA. As of July 30, 2025, spot silver trades at $42.71/oz, up over 20% year-to-date.

While gold prices soar and miners reap record profits, investor sentiment around mining stocks remains surprisingly muted. If history is any guide, the gap between metal prices and equity valuations may not last much longer.