Gold mining stocks capped one of their strongest weeks in years on Friday, with benchmark funds gaining more than 20% as bullion climbed to its highest level since mid-June.
The VanEck Gold Miners ETF (GDX) rose 21.09% over five days to $89.73 just after midday in New York. The VanEck Junior Gold Miners ETF (GDXJ) did even better, climbing 22.42% to $116.78.
Major producers moved sharply higher alongside the funds. Agnico Eagle Mines (TSX: AEM; NYSE: AEM) gained 22.92% over five days to C$250.17 in Toronto, while Newmont (NYSE: NEM) advanced 20.55% to $112.97 in New York. Barrick Mining (TSX: ABX; NYSE: B) climbed 19.22% to C$61.34.
The rally highlights miners’ leverage to the gold price: revenue can rise rapidly when bullion advances while many operating costs adjust more slowly, allowing stronger gold prices to flow disproportionately into earnings expectations and share valuations.
Gold breakout
Gold jumped more than 2% on Friday to about $4,353 an oz., according to TradingEconomics, reaching its highest level in about two months after weak US employment data accelerated a rally that had been building throughout the week.
The US economy unexpectedly shed 23,000 jobs in July, compared with expectations for an increase of about 80,000.
The surprise contraction shifted expectations for Federal Reserve policy, helping propel gold higher and adding momentum to mining equities.
Junior miners outpaced their larger peers, a pattern often seen during sharp increases in gold prices because smaller and higher-cost producers can have greater operational leverage to rising bullion prices.
The TSX Venture Composite Index, which has heavy exposure to small-cap junior mining companies, also gained 8% during the week.
Broader rally
The gains extended beyond gold, though other mining equities failed to match the precious-metal sector’s pace.
Copper miners advanced during the same five-day period, with the Global X Copper Miners ETF (COPX) gaining 12%.
The gap underscores the scale of gold miners’ rally. With GDX and GDXJ both gaining more than 20% in a single week and major producers posting similar advances, bullion’s breakout translated rapidly into a broad repricing of the sector.
Gold’s climb to a two-month high sent mining stocks soaring, with juniors leading as investors piled into leveraged exposure to bullion.
Copper miners joined the rally but lagged far behind, underscoring the scale of gold equities’ breakout.
