Rational Equity Asset Management released a white paper on Wednesday arguing that and mining equities represent a more profitable investment than the metals themselves, as miners trade at valuations below their decade-long averages despite generating double-digit free cash flow yields.
The firm’s report, titled ‘Beyond Bullion,’ notes that ₹1 lakh invested in gold mining equities, proxied by the VanEck Gold Miners ETF converted to INR, returned 278 per cent since gold’s structural break-out in August 2023, compared to 153 per cent for Indian gold ETFs and 130 per cent for physical gold over the same period.
The paper points to a widening gap between gold prices and miner valuations as the core opportunity. Gold has more than doubled since 2023, while mined supply has grown by roughly 1 per cent, a supply-demand imbalance the firm says is unlikely to correct quickly given long industry lead times. At a flat gold price of $4,500 per ounce, large-cap miners such as Newmont and Kinross generate free cash flow yields of 8–10 per cent, while mid- and small-cap producers screen at 15–35 per cent.
Rational Equity also highlights silver, which is heading for its sixth consecutive year of structural supply deficit in 2026, widening to 46 million ounces from 40 million in 2025. The firm notes that roughly three-quarters of silver supply is produced as a byproduct of other metals and cannot respond to silver-specific price signals.
On the recent correction in precious metals, the firm characterises the Q2 2026 sell-off, triggered by Iran conflict escalation pushing oil and US real yields higher, as a bull-market re-set rather than a trend reversal. The three-month rolling ETF outflow trough of 2.3 million ounces was a fraction of the 9.3 million ounces seen during the genuine 2013 capitulation.
The report notes that Indian investors currently hold almost no exposure to gold mining equities, and flags GIFT City’s IFSCA-regulated structures as a route for resident HNIs and NRIs to access global mining funds.
Rational Equity manages approximately ₹200 crore in assets.