I’ve called $GDXU the casino version of the gold trade. I still think that.
I also just bought 5,560 shares of it.
Last week is why.
AI investors got nuked. Chip stocks went down eight straight days and about $2 trillion in market value evaporated.
Meanwhile, gold sat there like nothing happened.
When there’s chaos, opportunity follows.
So here’s my thinking, and why I went with the 3x.
Gold Has Made a Lot of Experts Look Dumb
Gold was $369 in 1996. It’s around $4,160 today. That’s roughly 11x, while most of Bay Street was telling you to own anything else.
The funny part is who sold along the way. The UK dumped about 395 tonnes in 1999, more than half its gold, right around the bottom near $250. Canada sold its last ounce in 2016 at around $1,240.
Then 2025 happened. Gold was up 64%, its best year since 1979, with 53 record highs. In January it finally beat its 1980 peak, even after adjusting for inflation.
Yes, Gold Has Been Weak. I Don’t Care.
Gold is down about 25% from its January high.
The reason is bond yields. The 10-year Treasury went above 5% last month for the first time since 2007. When bonds pay you that much to sit around, a lot of money leaves gold to go collect that yield.
What the street and most of retail are missing is that yields peaked in early October and have been sliding since. When chips cracked last week, money ran straight into bonds and pushed yields even lower.
The one thing holding gold down is starting to roll over, and most people aren’t paying attention.
Every time gold pulls back, the same crowd comes out to declare the bull market dead.
In the mid-1970s, gold fell more than 40%. Time ran a cover on the great gold crash. Gold then ran more than 500% into 1980.
In 2008, it dropped about 30% in a few months. Three years later it was at all-time highs near $1,900.
Gold just had its best year since 1979, so a pullback after a run like that is pretty normal. The people selling here are the same people who’ll be buying back at $5K.
Central Banks Are Buying
While retail sells, China buys. The People’s Bank of China has added gold 23 months in a row, and it bought more after the price dropped, not less.
September was its biggest month since 2023, and gold fell more than 6% that month. China has added about 103 tonnes this year, and gold is still under 10% of its reserves.
It’s not just China. Central banks now hold more gold than US Treasuries for the first time since the mid-1990s.
And then there’s Canada. We’re the only G7 country with no gold at all. Ottawa sold the last of it in 2016 at around $1,240 because bonds paid interest and gold didn’t. We used to hold about 1,023 tonnes. At today’s price, that’s roughly US$137 billion. Great call, guys.
The Miners Are Printing Money and Nobody Cares
Gold producers are making more money right now than they ever have, with record margins and record free cash flow across the big names. Newmont is throwing off cash like it’s going out of style, and gold is still sitting above $4,000.
Meanwhile, $GDX is still down about a quarter from its high. I’m more than happy to buy record profits at a discount.
The juniors are even cheaper, and money is starting to come back in.
48 of the 50 companies on the 2026 TSX Venture 50 were miners, and they were up an average of 431% in 2025. But the typical explorer still trades at about 0.3x to 0.6x NAV with gold above $4,000.
I’ve watched that gap close firsthand. When I first wrote about Axcap, Converse was valued at around $5 an ounce in the ground. SSR Mining just agreed to pay over $100 an ounce for it.
It always goes in the same order. Producers move first, then developers, then explorers. Producers have moved. Developers are getting bought out. Explorers are next.
Why $GDXU
Here’s where you can call me an idiot.
I bought 5,560 shares of $GDXU, the 3x leveraged gold miners ETN. It gives you three times the daily move of the big gold miner ETFs and resets every day.
You can see what that did this year. It ran about 20x, then fell 88%. In a choppy market it bleeds even when miners go nowhere. It’s the degenerate way to play gold and I’m fully aware of that.
I want the most torque I can get on the turn. When gold miners move, they rip, and $GDXU rips three times harder. It bounced about 15% in two days last week while everybody else was dumping NVIDIA at the lows.
Spare me the volatility lecture. I sized this so a bad month doesn’t bother me, and if the thesis breaks, I’ll cut it and move on.
Want safe? Buy a GIC. Want to own the businesses? Buy $GDX or the juniors. If you want to actually get paid on the rerate and you can stomach watching it get cut in half, $GDXU is the way to do it.
What Could Go Wrong
It’s a dicey move, and there are a few ways it can go wrong.
- Yields turn back up. If the Fed keeps hiking and the 10-year pushes back over 5%, gold likely takes another leg down.
- Leverage cuts both ways. A bad week for miners is a terrible week for $GDXU. This year it fell 88% from peak to trough.
- Forced selling. In a real panic, people sell gold to cover losses elsewhere. It happened in 2008.
- Credit risk. $GDXU is an unsecured BMO note, not a basket of mining shares. You’re on the hook for the bank.
My Take
The AI crowd spent last week learning that stocks can go down. Gold barely moved, yields are rolling over, and the miners are making record money while trading at a discount.
Central banks have been buying for years. China hasn’t missed a month in almost two. Canada sold everything. I know which side I’d rather be on.
The juniors are still where I think the biggest upside is. $GDXU is my bet on the turn.
Go buy a couple of bullion coins and feel responsible. I’ll be over here with the 3x.
Sources
- Gold’s January 2026 high · 2025’s 64% gain · 53 records in 2025
- PBOC September 2026 reserves · 103 tonnes in 2026 · SCMP, under 10% of reserves
- Gold overtakes Treasuries (bne IntelliNews / Bloomberg) · Canada’s reserves at zero
- S&P junior financing data (Crux Investor) · Junior P/NAV (Crux Investor) · 2026 TSX Venture 50
- GDXU profile · GDXU monthly closes · GDXU 2026 range
- Still to source: the 10-year above 5%, yields peaking in early October, the $2 trillion chip sell-off, GDXU’s 15% two-day bounce, the Time cover
Disclaimer
Torque Capital Partners (“we” or “us”) are not registered brokers, dealers, investment advisors, or financial advisors. The information contained in this article is for informational and educational purposes only and should not be construed as investment advice or a recommendation to buy or sell any securities, including any exchange-traded product. Always conduct your own due diligence before making investment decisions.
Position disclosure: The author holds 5,560 shares of the MicroSectors Gold Miners 3X Leveraged ETN (GDXU). The author may buy or sell this position at any time, including shortly after publication, without notice.
Leveraged exchange-traded notes such as GDXU are complex products intended for short holding periods. They reset daily, can lose most of their value in a short time even when the underlying sector is flat or rising, and carry the credit risk of the issuing bank. They are not suitable for most investors.
Roxmore Resources Inc. (formerly Axcap Ventures Inc.) previously engaged Torque Capital Partners for a paid marketing and awareness campaign. That engagement has ended.
This article does not constitute an offer to sell or a solicitation of an offer to buy any securities. All investments carry risk, and the securities of junior mining and exploration companies should be considered highly speculative. Past performance is not indicative of future results. Readers are encouraged to independently verify all information and consult a licensed financial advisor before making any investment decision.
