Gold and silver miners including Newmont Corporation (NYSE:NEM), Barrick Mining Corp (NYSE:B), First Majestic Silver Corp (NYSE:AG) and Pan American Silver Corp (NYSE:PAAS) closed lower Thursday, potentially due to profit-taking.
Their otherwise recent moves higher track an extraordinary run in the underlying metals: gold has jumped roughly 95% over the past year while silver has soared more than 270%, making the two largest assets in the world by market value.
Here’s what investors need to know.
- Newmont shares are retreating from recent levels. Why is NEM stock dropping?
Historic Gold and Silver Moves Behind The Rally
The latest leg higher has been driven by fears over U.S. fiscal sustainability and the independence of the Federal Reserve. Exploding deficits, record interest expenses and political pressure on Chair Jerome Powell have fueled worries about long-term dollar credibility, a backdrop that has historically favored precious metals.
Silver’s monthly gain of around 65% is its biggest since January 1864, a Civil War episode associated with severe stress in the monetary system, a comparison that has not gone unnoticed by macro traders.
SLV, GLD Highlight Safe-Haven Stampede
ETF flows underscore the story. SPDR Gold Trust (NYSE:GLD) has rallied about 95% over the past year, helped by a JPMorgan call that gold could ultimately climb toward $8,500 if private investors raise allocations.
The iShares Silver Trust (NYSE:SLV) is trading near record highs after spot silver burst through $110 an ounce on safe-haven demand tied to Chinese “zombie banks,” escalating trade tensions and renewed U.S. shutdown risk.
Why Gold and Silver Miners Drop When Metal Prices Fall
NEM, B, AG and PAAS are essentially leveraged plays on gold and silver. Their revenue is directly tied to metal prices, but many costs — energy, labor, equipment, debt— are fixed or slow to adjust.
When gold and silver fall, each dollar of price decline squeezes margins disproportionately, slashing expected cash flow and earnings. That hits valuations, especially after big runs driven by bullish sentiment.
At the same time, traders may be unwinding leveraged bets on Thursday, leading to outflows from commodity ETFs and adding even more selling pressure to miners than to the metals themselves.
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