From "safe haven" to "ATM": Global gold mining stocks give back annual gains after being hit by the double blow of oil price and interest rate.

Notice that, due to the surge in oil prices during the Iran war, traders have lowered their expectations for interest rate cuts, causing global gold mining stocks to plummet. The performance so far this year has turned from positive to negative. The New York Stock Exchange Arca Gold Mining Index fell by 6.6% on Thursday, hitting the lowest level since December of last year. The index covers companies from the United States, Canada, the United Kingdom, and Australia, and has accumulated a decline of about 1.9% since the beginning of 2026. On March 2nd (the first trading day after the US launched attacks on Iran and Iran subsequently retaliated), the index had risen by as much as 35%. The weakness in this sector further intensified on Thursday, as the escalation of the Persian Gulf conflict pushed up oil prices and led to the seventh consecutive day of decline in gold prices, marking the longest streak of decline for the metal since October 2023. On Friday, gold prices approached $4640 per ounce, dropping nearly 8% for the week, marking the biggest decline since March 2020. Since the outbreak of the war, gold has fallen by about 12%, as the risk of inflation from higher energy costs makes it harder for central banks to lower borrowing costs. This poses a risk to gold prices because gold does not generate income and typically performs better when interest rates are low. Traders are no longer expecting the Fed to ease policy this year, with some even hedging against potential rate hikes. Expectations for interest rate cuts fading, gold prices under pressure Jefferies Financial Group Inc. analyst Christopher LaFemina said, "Currently, investors are focused on profit margins and the double blow that falling gold prices and rising energy/material costs could bring," stating that in a scenario of prolonged conflict, rising interest rate expectations and a stronger US dollar could put more pressure on gold. Former precious metals trader at J.P. Morgan and current independent market commentator Robert Gottlieb said, "Don't buy on the dip - the volatility is too great," adding, "There may be more selling before the volatility starts to abate and prices consolidate." Another force that has been unfavorable for gold in recent weeks is the US dollar becoming a key safe-haven asset during the conflict, with the Bloomberg Dollar Spot Index rising by 1.5% in March. As gold is priced in dollars, this makes the precious metal relatively more expensive for buyers holding other currencies. War ends record rally for gold mining stocks Gold mining stocks saw a significant influx of funds in 2025, when the Bloomberg Dollar Index fell by around 8%. Gold prices rose by 65% last year, setting a series of all-time highs. Newmont Mining (NEM.US), Agnico Eagle Mines Ltd., and Barrick Gold Corporation (B.US) all rose by over 115% in 2025 - a surge that is more common in speculative assets rather than metals seen as safe havens. Now, with the war dragging on, some investors are selling these stocks. Matthew Tuttle, CEO of Tuttle Capital Management, said, "When volatility strikes, markets sell any liquid assets, and mining stocks are very liquid," adding, "combined with fears of ongoing high oil prices, you will see a rapid, brutal collapse - even companies still generating cash flow have not been spared." According to tracked analyst data, Barrick Gold Corporation's annual profit is expected to increase by 55% this year, while Agnico Eagle Mines' profit is expected to grow by 72% year-on-year. Both companies are headquartered in Toronto. Analysts say that while the drop in gold prices will drag down revenue, large mining companies may be cushioned by the significant increase in gold prices in recent years. After all, since the end of 2023, gold prices have soared by over 120%, providing strong support for the gold mining stock index, which has risen by over 170% during this period. Tuttle wrote that if oil prices stabilize and pressure from interest rates and the dollar weakens, mining companies with net cash, low costs, and high-quality assets (like Newmont Mining and Agnico Eagle) may see a rebound.