Shock in the market, gold-mining companies hit

KEY TAKEAWAYS:

• A new bout of turmoil with gold pulling back and mining stocks being doubly penalized
• Unfavourable short‑term factors, while long‑term fundamentals remain solid
• Rising production costs are not a cause for concern - we take this opportunity to add selectively to certain positions

A large-scale shock

The attack on Qatar’s gas facilities by Iran has had an impact across the board and triggered a new sell-off in risky assets. During these periods of broad-based selling, gold is also sold in order to meet liquidity needs. Gold-mining equities are taking a double hit: falling gold and share prices. In this occasion, the move is being amplified by the strong performance in 2025 (Gold +65%, NYSE Arca Gold Miners index +165%) and in 2026: as of 27 February, CM-AM Global Gold was up 32%. Investors are taking profits in those segments of the market that have risen the most. Moreover, after a month of war, the price of oil surged, putting pressure on all the world's economies. The current volatility in the sector is not unusual in this type of context. On the day of Trump's ultimatum (07/04/2026), gold and the gold companies index were still up 7.7% and 10.7% in USD since the beginning of the year.

Focus on our gold trend indicators

In the short term, some indicators are less favourable: the potentially inflationary environment has reduced expectations of additional rate cuts, particularly by the Fed, while the US dollar is showing strength. In the short term, sales of gold ETFs and unwinding of positions on COMEX* are weighing on prices. A few central banks are taking advantage of high prices and drawing on their gold reserves to fund some spending (e.g. Poland and Russia).

However, after the shock, physical demand over the medium to long term should pick up again as prices decline. Indeed, the sharp rally at the end of 2025 and beginning of 2026 curbed physical gold purchases, especially in jewellery, which is the most price‑sensitive segment. The same applies to central banks: in early January, Poland’s central bank stated that it intended to continue its purchases (+15 tonnes planned in 2026) before backtracking on this statement at the end of February.

Long-term drivers such as the de‑dollarisation of the global economy remain in place. The war against Iran and the “battle for the Strait of Hormuz,” now dragging on, are generating geopolitical instability, economic risks (stagflation, recession, disruption of energy supply chains, etc.) and financial instability — all of which are supportive for gold and safe‑haven assets – with the outcome and timing of this war remaining uncertain.

For more information, see the document below