A miner looks over Australia’s largest open-pit gold mine, the Fimiston open pit, also known as the super pit, in the gold mining town of Kalgoorlie, about 500 kilometers east of Perth.
David Gray | Reuters
Gold prices fell again on Monday morning as investors continued to avoid exposure to the yellow precious metal. As the war in Iran continues, its status as a safe trade is being tested.
The recent decline will inevitably have a secondary impact on miners, whose market value soared as gold prices soared before the war.
Mining companies are among the most volatile stocks, typically acting as leveraged bets on the price of gold, rising during bullish periods in commodity markets and falling further during bearish periods. After the war, falling gold prices reduced miners’ incomes, and oil and gas supply shocks drove up energy prices and increased costs.
Before the dispute, both companies were enjoying impressive profits as the price of gold soared to an all-time high of more than $5,500 an ounce. After falling sharply in early trading, spot gold was trading 1.3% lower at $4.432.09/oz as of 7:14 a.m. ET on parling gains.
VanEck Gold Miners ETF It rose almost 200% in 2025, but some of that increase has since declined. The fund is down 27% since the beginning of the year and shows little sign of recovery as the U.S. and Israel’s war against Iran intensifies.
Comparison of VanEck Gold Miners ETF price and historical gold spot price through 2026.
The outlook for miners has changed significantly over the past few weeks, with market volatility weighing on margins on both ends.
“It will be interesting to see how the resources sector responds to both energy supply shocks and geopolitical risk events,” said Rob Stein, head of resources research at Macquarie Capital.
“Increased uncertainty and the combination of the two could prompt changes at asset allocation levels, with the recent rally providing the basis for profit-taking, particularly in smaller markets.”
Russ Mold, investment director at AJ Bell, added that rising energy costs were a “real threat” to gold miners’ profits.
“We saw this situation in 2006-2007 as the overall cost of production rose sharply,” he added.
Although gold bullion is a pure commodity transaction, miners pose additional equity risks and are sensitive to an increasingly volatile macroeconomic environment.
“Miners are highly exposed to economic shocks, which is why investors are exiting the sector,” said Michael Field, chief equity strategist at Morningstar.
“Unless risk sentiment improves and confidence in global growth returns, miners are unlikely to resume their bullish course.”
Field added that there is also an element of investors selling the best-performing assets in recent years to make a profit and raise cash.
The retreat from gold, traditionally seen as a key safe-haven asset during market turmoil, is consistent with the ongoing risk-off sentiment in markets as the Iran conflict raises concerns about inflation and rising energy prices.
Market strategists recently told CNBC that the prospect of higher interest rates as a result of the war could prompt investors to buy government bonds at the expense of lower-yielding precious metals.
