Mining stocks have tumbled as multiple metals repeatedly shatter records, but analysts are divided on whether this will continue.
February gold futures It hit a record of $5,100 an ounce on Sunday. March silver futures The next day, it reached a high of $115.5 per ounce. Investors tend to flock to gold during times of uncertainty as it is seen as a safe haven, and silver tends to track the yellow metal.
Copper prices have also increased significantly since August, after a significant drop in prices, likely driven by demand from electrification and the hardware in which copper is used.
The iShares MSCI Global Metals and Mining Producers ETF hit an all-time high of $59.58 on Monday. rio tintoOn the same day, the company, which is in talks to acquire Glencore, hit its highest price since March 2021. and Fresnillo‘s stock price has soared over the past year, reaching an all-time high of $4,448. Antofagasta also advanced to its highest ever.
“Mining stocks in particular looked really good in the race, and I think that’s why the market continues to be defensive,” Wren investment director Rory McPherson told CNBC’s “Squawk Box Europe” on January 26.
British mining stocks in particular “remain very undervalued”, which could contribute to higher prices, he said.
However, the scale of the rally casts doubt on whether precious metals are a safeguard.
“Given the inherent cyclicality of mining stocks, mining stocks are not defensive in the best of times, and that’s even more so now given the overall strength in the mining industry, led by gold and other precious metals, copper and aluminum,” John Mills, an analyst who covers global miners at Morningstar, told CNBC via email.
In addition to the frenzy around gold, aluminum and copper, iron ore prices remain strong at around $105 per tonne, Mills said, noting that iron ore is the biggest revenue driver for many large mining companies. BHPRio Tinto, veiland Fortescue.
“As for small metals, silver is also at historic highs, while platinum has retreated slightly from recent highs. Even lithium has rebounded significantly in recent months after hitting a cyclical low in 2025,” he added.
But appetite for mining stocks has cooled over the past six months, one person said. city Investment banker Efrem Rabi wrote that during this period, the buy rating fell from above 70 to 60, while the neutral and sell ratings rose.
He believes there are three reasons for emotional changes. “Most of the miners are heavy on iron ore and iron ore prices have remained range-bound,” Ravi said. He added that shares of major mining companies have risen about 20-50% in the past six months, driven primarily by higher prices for copper and aluminum. This has pushed up valuations and made investment deals less attractive.
That said, Citi remains bullish on gold in the short term due to heightened geopolitical risks, supply shortages and continued uncertainty over the independence of the Federal Reserve in the face of pressure from President Donald Trump.
“Precious metal miners in particular have become ‘incredibly expensive,'” Panmure Liberum strategist Joachim Klement told Squawk Box Europe on January 27.
“They’ve gone up significantly based on this rally in gold and silver, but it looks a little unsustainable to me in the short term,” he said.
