The 90% Margin Club

Happy Tuesday, GoldBuzzers!

Last week, I covered gold miner ETF alternatives. This week: the companies those ETFs are quietly loading up on - gold royalty and streaming plays - a potentially great way to ride this bull market.

Let's dive in.

What a way to start the week, GoldBuzzers. Gold powered up over $4,300 per ounce on Monday, while silver absolutely ripped higher, closing over $64. The catalyst? A surprisingly weak Empire State Manufacturing Survey this morning showed deeper-than-expected contraction in factory activity, hammering the dollar and collapsing real yields as markets now bet on more aggressive Fed easing ahead.

Gold has now surged over 66% year-to-date, on track for its strongest annual gain since 1979, driven by relentless central bank buying, surging ETF inflows, and the ongoing flight from sovereign debt. But silver is the real story this year - up an astounding 119% since January, crushing its golden cousin and compressing the gold/silver ratio to 67.72.

Silver hit an all-time high of $64.66 earlier this month, fueled by tightening inventories, its recent addition to the US critical minerals list, and insatiable demand from solar, EV, and data center sectors.

Last week's Fed rate cut (the third 25bps trim this year) keeps the tailwind blowing, though three dissenting policymakers still think inflation is too hot - meaning the 2026 rate path remains foggy.

Eyes now turn to Tuesday's jobs report and Thursday's inflation data. The message from today's action is crystal clear: when manufacturing data tanks and the dollar stumbles, physical metal is where capital wants to be. Stay stacked. 🥇

Last week I mentioned GOAU's 30% allocation to royalty and streaming companies. A few of you asked: what exactly are these things, and why should I care?

Great question. Let me explain why these might be the most elegant way to play gold - and break down the top names worth knowing.

Traditional miners dig holes, manage thousands of employees, fight permit battles, and pray their costs don't explode. Royalty and streaming companies do none of that.

Instead, they write checks.

A royalty company provides upfront capital to a miner in exchange for a percentage of future revenue - forever. A streaming company does something similar but buys the right to purchase metal at a fixed discount (say, $400/oz when gold's at $4,200).

The result? Royalty companies generate 80-90% profit margins while miners sweat for 20-30%. No labor strikes. No mine floods. No cost inflation eating your lunch.

They're essentially toll booths on the gold highway.

vs. individual miners: One bad quarter, one operational disaster, and a single mining stock can crater 40%. Royalty companies typically hold 100-400+ royalties across dozens of mines. Built-in diversification without the research headache.

vs. mining ETFs: GDX gives you gold leverage but also every operational risk in the sector. Royalty companies give you gold exposure with bond-like stability - and they actually pay meaningful dividends.

The trade-off? In a face-ripping gold rally, pure miners will outperform. But over full cycles, royalty companies have matched or beaten mining ETFs with roughly half the volatility.

Franco-Nevada (FNV) Market cap: ~$41B | Dividend yield: ~0.75%

The blue chip. Franco holds 400+ royalties across gold, silver, copper, and even oil & gas. Zero debt, $1.4B in available capital, and a 17-year track record of dividend increases. If you're buying one royalty company and forgetting about it, this is probably it.

Wheaton Precious Metals (WPM) Market cap: ~$53B | Dividend yield: ~0.56%

The streaming king. Wheaton focuses on silver and gold streams from top-tier mines - including Vale's Salobo (one of the world's best copper-gold operations). Their average purchase price is around $450/oz for gold. At $4,200 spot, do the math on those margins.

Royal Gold (RGLD) Market cap: ~$18B | Dividend yield: ~0.9%

The purest royalty play. 175+ royalties, mostly gold, with major exposure to Barrick's Nevada operations and Cortez. Smaller than Franco but growing faster - they've been aggressive on acquisitions this year, including Sandstorm Gold.

OR Royalties (formerly Osisko Gold Royalties) (OR) Market cap: ~$6B | Dividend yield: ~0.6%

The Canadian specialist. OR’s crown jewel is a 5% royalty on the Canadian Malartic mine - one of Canada's largest gold operations. Higher yield than the big three, with more growth runway (and more volatility).

Royalty companies won't give you 10x returns in a gold mania. But they also won't give you a heart attack when a mine collapses in Peru.

For GoldBuzzers who want gold exposure without becoming amateur mining analysts, this sector deserves a serious look. Think of them as the landlords of the gold world - collecting rent while someone else does the hard work.

That’s all for this Tuesday, folks. I’ll see you on Thursday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com