Shares of mining companies sold off steeply on Thursday as prices for precious metals fell, pressured by a surge in energy costs and the related shift in expectations for monetary policy. Gold fell roughly 6% toward $4,500 an ounce, recording a seventh consecutive day of declines - its longest losing run since 2023. Silver plunged about 13%, and aluminum shed more than 8%.
The slide in commodity prices hit mining stocks across the board. AngloGold Ashanti led declines among the names reported, down about 13%. Hecla Mining fell roughly 11%, while Americas Gold and Silver, First Majestic Silver and Endeavour Silver each lost close to 10%. Coeur Mining declined about 10%, and Silvercorp Metals dropped roughly 11%.
Major gold producers were not spared. Newmont and Barrick Mining each fell about 8%, and Kinross Gold declined approximately 10%. Pan American Silver dropped near 8%, Fortuna Mining fell about 9%, and Teck Resources slipped around 9%. Freeport-McMoRan declined roughly 6%.
Analysts and market participants pointed to the escalation of the conflict in the Middle East as a key catalyst for the recent moves. The rise in oil and gas prices tied to the conflict has increased inflationary pressures in markets, which in turn reduces the likelihood that central banks will move quickly to cut interest rates. For gold - a metal that does not yield interest - the prospect of fewer or later rate reductions represents a headwind, as higher real yields generally make non-yielding assets less attractive to investors.
On Wednesday, the Federal Reserve left interest rates unchanged and projected a single rate cut for the year. Fed Chair Jerome Powell emphasized that any reduction in rates would depend on a demonstrable slowdown in inflation. The Feds guidance and the stronger energy prices together have pushed market expectations toward fewer near-term easing moves, weighing on gold and related shares.
Market observers noted that golds recent weakness echoes episodes of commodity-driven volatility in prior years. While the current swings in precious metals have been less dramatic than the sharp moves seen in January, the persistent fluctuations have nonetheless discouraged some investors who look to gold and silver as portfolio havens.
Bottom line: Rising energy costs tied to geopolitical tensions have amplified inflation concerns and reduced the perceived likelihood of near-term Fed rate cuts, pressuring non-yielding assets such as gold and triggering broad declines across mining stocks.