Gold miners jump 10–16% as Schiff bets on inflation-driven gold rally

what happened

Gold mining stocks were among the few bright spots in a losing week for US equities, catching the attention of longtime gold bull Peter Schiff. In a post on X, the economist argued that a political shift to the left could push inflation higher and create an especially favorable backdrop for gold. He said the recent gains in miners were an early sign of a larger move in the metal.

According to Stocktwits, the S&P 500, Nasdaq and Dow proxies SPY, QQQ and DIA finished the week lower, while the VanEck Gold Miners ETF (GDX) climbed noticeably. Shares of Newmont (NEM), Agnico Eagle (AEM), Barrick Mining (B) and Franco-Nevada (FNV) gained between 10% and 16% over the week. Schiff put it this way: “This is a sign of things to come. A sharp turn to the left, and the higher inflation that will result, will be extremely bullish for gold.”

Spot gold rebounded after three weeks of losses, posting its best week since August, according to analysts at ING Think. They credited bargain hunting and lower oil prices, which eased some inflation worries as signs of easing U.S.-Iran tensions emerged. ING warned, however, that a sustained recovery faces headwinds from expectations of higher rates and a stronger dollar.

why it matters

Miners often move more than the metal itself, so their gains during a weak stock market are sensitive to shifts in inflation, rate and dollar expectations. For now, the inflation scenario is one commentator's view, while rate and dollar pressures remain in place.

market impact

Gold: inflation expectations support the metal, while rates and the dollar weigh on it

• ↔Gold mixed — inflation expectations and the rebound support the metal, while higher rate expectations and a stronger dollar weigh on it
• ↔GDX mixed — miner gains track gold, but remain exposed to its volatility and to rate expectations

tags

instruments