The Incrementum Active Aurum Signal: A Smarter Way to Invest in Gold Miners

Why Timing Matters in Gold Mining Stocks

Gold is not a monolith. While physical gold serves as a store of value and hedge against systemic risks, gold mining equities are what Incrementum calls performance gold. These stocks provide leveraged exposure to the gold price—but come with elevated volatility, operational risk, and market cyclicality.

Simply buying and holding mining stocks is rarely a winning strategy. Enter the Incrementum Active Aurum Signal (IAAS)—a dynamic, rules-based model that helps investors actively manage exposure to gold mining equities.

The Model Behind the Strategy

The IAAS is the allocation engine behind the Incrementum Active Gold Fund, and it adjusts positioning between three regimes:

• ✅ Offensive: Increase gold equity exposure
• ⚖️ Neutral: Maintain balanced exposure
• 🛑 Defensive: Reduce or hedge risk

It is built from two distinct components: a Cycle Signal and a Fundamental Signal.

1. The Cycle Signal: Contrarian by Design

The Cycle Signal integrates five contrarian inputs to assess market sentiment and momentum:

• RSI of gold miners – identifies overbought/oversold conditions
• CFTC positioning – reveals extremes in speculative sentiment
• Bollinger Band spreads – measures market risk appetite
• TIPS real yields – reflects inflation expectations and real rates
• Deviation from moving averages – detects valuation anomalies

These are aggregated into a composite score (0–100). A reading below 20 signals a strong buy opportunity; above 85 triggers a sell.

2. The Fundamental Signal: Margin-Driven

This signal is binary—either 100 or 0—based on the profitability of gold miners. It uses a proprietary margin trend model to assess the industry’s current operating environment.

Together, the cycle and fundamental signals determine whether the IAAS suggests an offensive, neutral, or defensive stance.

Performance: A Quantitative Edge

Backtesting the IAAS strategy from 1971 to 2025 shows powerful results:

• Active strategy (IAAS): +11,107% total return, 9.17% CAGR
• Passive buy-and-hold: +716% total return, 3.98% CAGR

This performance wasn’t driven by lucky timing—it was consistent across decades. Importantly, the IAAS also significantly reduces risk:

Real-World Application

Since December 2023, the IAAS has signaled an Offensive stance. The results speak for themselves:
📈 GDX is up +53% over the following 74 weeks—more than double the historic average return during offensive signal periods.

The IAAS isn’t theoretical. It is the tactical foundation of the Incrementum Active Gold Fund, providing investors with a data-driven alternative to passive exposure in an inherently volatile sector.

Final Thoughts: Data Over Drama

Gold mining stocks remain undervalued relative to physical gold and broader equity markets. As macro tailwinds return—Fed easing, rising gold prices, and equity market uncertainty—investors are once again looking to gold miners for outperformance.

But with high volatility and frequent false starts, success depends on smart timing. That’s where the Incrementum Active Aurum Signal comes in:
✔️ Quantitative.
✔️ Repeatable.
✔️ Proven.

💼 Learn more about the fund using IAAS.
🧮 Check out the Incrementum Active Gold Fund https://www.incrementum.li/en/investment-funds/incrementum-active-gold-fund/

📘 Read the full 2025 In Gold We Trust Report
🔗 https://ingoldwetrust.report/in-gold-we-trust-report/?lang=en

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