Recently, I noticed a pretty interesting phenomenon—gold prices breaking above $3,500 per ounce to hit a new all-time high, but the real opportunity might not be in gold itself, rather in the companies that mine gold.

The logic behind this rally is actually quite clear. Expectations of Federal Reserve rate cuts are heating up, and low interest rates will weaken the opportunity cost of holding gold, which is a traditional supply and demand relationship. Coupled with increasing geopolitical uncertainties and central banks around the world aggressively buying gold to diversify away from the dollar, all of these are supporting the precious metals market. Simply put, the current environment is very friendly to gold.

But here’s a key point—profit growth for mining companies often far exceeds the rise in gold prices. Why? Because mining firms have fixed costs, and once those are covered, the profit per ounce of gold becomes essentially pure profit. This is what’s called operational leverage. Data confirms this logic: gold is up 42% year-to-date, but the GDX gold mining ETF has doubled, with a 91% increase.

GDX manages nearly $19 billion in assets, making it one of the largest and most liquid funds in this space. Its portfolio includes 71 mining companies, with the top ten holdings being industry giants like Newmont, Agnico Eagle, and Barrick, accounting for over 65%. This structure amplifies potential gains while reducing individual company risk through diversification. Its expense ratio is only 0.51%, which is quite reasonable.

Even more interesting are the signals from the options market. Recently, GDX’s call options volume has been more than twice that of put options, indicating that active traders are generally optimistic about the future. Although there are $2.4 billion in short positions betting on a decline, the overall trading sentiment remains bullish.

If you’re considering participating in this gold rally, instead of directly buying physical gold or gold ETFs, it might be better to look at these gold mining stocks to buy. Funds like GDX offer a relatively balanced option—leveraging to amplify gains while providing diversification to manage risk. I’ve also been monitoring related mining assets on Gate, so if you’re interested, you can check them out yourself.