Mining stocks tumble as gold prices sink on rate concerns

Investing.com -- Mining stocks fell sharply Thursday as precious metals prices declined amid concerns that rising oil prices will delay Federal Reserve interest rate cuts.

Gold dropped 6% toward $4,500 an ounce, marking its seventh consecutive session of losses and the longest losing streak since 2023. Silver tumbled 13%, while aluminum fell more than 8%.

AngloGold Ashanti declined 13%, while Hecla Mining dropped 11%. Americas Gold and Silver, First Majestic Silver, and Endeavour Silver each fell 10%, with Coeur Mining also down 10%. Silvercorp Metals declined 11%.

Major gold producers Newmont and Barrick Mining each fell 8%, while Kinross Gold dropped 10%. Pan American Silver declined 8%, Fortuna Mining fell 9%, and Teck Resources dropped 9%. Freeport-McMoRan declined 6%.

The escalating war in the Middle East drove oil and gas prices higher, raising inflationary risks that reduce the likelihood of near-term rate cuts by the Federal Reserve and other central banks. Gold, which doesn’t pay interest, faces headwinds when rate cuts become less likely.

On Wednesday, the Fed held interest rates steady and projected just one cut this year, with Chair Jerome Powell saying a reduction would depend on slower inflation.

Gold’s recent performance mirrors its decline through the summer of 2022, when Russia’s invasion of Ukraine caused an energy price shock that rippled through global markets. While volatility in precious metals has calmed compared to the wild price swings in January, fluctuations have deterred some investors seeking a haven.

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