After experiencing robust gains throughout 2025 and early 2026, gold prices have recently fallen sharply, sending mining stocks into a downward trajectory. Newmont (NEM), one of the most closely watched gold stocks, has been significantly impacted by this commodity price correction. In the month ending March 24, Newmont’s stock price dropped 20.3%, with the decline exceeding that of the world’s largest physically backed gold exchange-traded fund (ETF) by nearly 430 basis points.
The recent performance of gold miners aligns with market expectations, as their stock prices are highly correlated with gold prices, often exhibiting greater volatility than gold itself. This phenomenon stems from the relatively fixed cost structure of mining companies—when gold prices fluctuate, extraction costs typically do not move in tandem, thereby amplifying the volatility of corporate earnings. However, mining companies are currently facing multiple pressures on the cost side.
The fortunes of gold miners such as Newmont are closely tied to gold prices. The current weakness in gold prices is primarily driven by two factors. First, a stronger US dollar and rising bond yields. Since commodities are priced in dollars, a strong dollar typically exerts downward pressure on them. Second, the Federal Reserve did not cut interest rates this month and may deliver only one rate cut this year, disappointing investors who had previously anticipated multiple cuts. Rising bond yields directly lead to lower bond prices while diminishing gold’s appeal—holding government bonds generates interest income, whereas gold produces no dividends or interest, making interest-bearing assets more attractive to investors amid commodity market volatility.
In addition, geopolitical factors are adding pressure to mining stocks. Ongoing conflicts in the Iran region have kept international oil prices near $100 per barrel, with the potential for further increases. Mining is an energy-intensive industry, where energy costs (including diesel for excavators, trucks, and other equipment) account for approximately 20% to 30% of total costs, making high oil prices a direct blow to miner profitability.
While no certainty exists in the investment landscape, a rebound in gold prices could drive a recovery in Newmont’s stock price. From a fundamental perspective, the company maintains an investment-grade credit rating, remains committed to reducing debt levels, repurchasing shares, and pursuing prudent capital expenditure strategies—avoiding reckless expansion even if gold prices reach new highs.
Notably, gold prices briefly fell to a four-month low below $4,100 per ounce on March 23, pressured by high oil prices, inflationary pressures, elevated interest rates, and geopolitical conflicts. However, this decline proved short-lived, as prices rebounded to above $4,500 per ounce by the end of the week, posting a weekly gain of nearly 10% following a temporary easing of related tensions.
As of the close on March 27, Newmont’s stock price stood at $99.36, still 26% below its 52-week high. The company achieved a record $7.3 billion in free cash flow in 2025, repaid $3.4 billion in debt throughout the year to optimize its balance sheet, and continued its share repurchase program while paying dividends. Management has set a target of maintaining a minimum cash balance of $5 billion across commodity cycles, and this robust financial strategy has attracted investors to buy Newmont shares on dips amid the gold price correction.
