Gold prices may cool, but there's long term appeal amid rampant volatility
 | Will Gold Mining Seasonality
Win Out This Month?
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| Certainty is at a premium right now. In the blink of an eye, stock market sentiment has shifted beneath investors' feet, and contrarian traders must now be prepared to put what few certainties are out there under the microscope. Thanks to 11 record highs in 2025, the word is out that bullion could be a beacon of stability amid a volatile economic outlook. Global uncertainty is just one piece of the puzzle though; speculation also depends on how and when the inflation overhang is resolved. On Friday afternoon, the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE), came in-line with expectations, a good-but-not-great metric that likely keeps the Federal Reserve in a holding pattern with interest rate cuts.
A cautious Fed and persistent inflationary environment validates investors who have suddenly become risk-averse. With all eyes on gold right now, how should a contrarian investor assess the sector's sprawling landscape? The answer is, in keeping with the times, uncertain. | The World Gold Council reports that global investment demand for bullion increased 25% in 2024. Last year was gold prices' biggest one-year rise on record, and the safe-haven asset has added 8.2% in 2025, more than the Dow, S&P 500, and Nasdaq combined. Gold prices have enjoyed a major boost in demand since 2022, thanks in large part to central banks across the world buying up the asset to diversify out of the U.S. dollar, in response to the U.S. and allies freezing Russia's central bank assets after its invasion of Ukraine in 2022. China in particular has been loading up, with the People's Bank of China boosting its gold reserves in January, the third-straight month of doing so after a brief pause last year.
Big banks are also loving gold right now. Goldman Sachs hiked its gold price target to $3,100, while JPMorgan Chase and Bank of America view the looming trade war as a tailwind for gold in 2025. How can an investor focused on equities or without means of getting their hands on gold take advantage? Gold is an independent asset without expenses, and mining companies have to incur costs and therefore tend to straggle behind gold prices. Therefore, the rap on gold mining stocks is that they severely lag behind actual gold prices and thus don't offer a ton of lucrative appeal to investors as anything other than a hedge. However, consider the chart below from a Bloomberg report aptly titled "Gold Stocks Glitter as Worries Around Inflation, Tariffs Flare." This year though, so far, gold miners are answering the call. |  | The VanEck Vectors Gold Miners (GDX) exchange-traded fund (ETF) is 6.4% higher year-to-date and boasts a 53% year-over-year gain. March also tends to be a historically bullish month for the ETF; per Schaeffer's Senior Quantitative Analyst Rocky White, GDX averages a 3.4% return in March and a 70%-win rate, going back 10 years. This is the best average 10-year return of any ETF we track. And there's even some contrarian potential to be mined, amid a heavy put bias. The fund's 10-and 50-day buy-to-open call/put volume ratios of 1.56 and 1.42 rank in the 92nd and 99th percentile of their annual ranges, respectively. | | |  |  | GDX's top holding and the U.S.' largest gold miner, Newmont Corporation (NYSE:NEM), is 13% higher year-to-date and up 41% year-over-year while also entering a period of bullish seasonality. White's data shows Newmont stock with an average March return of 4.8% and a win rate of 80%, going back 10 years. This is a welcome sign for bulls, considering gold prices spent the last week retreating away from that vaunted $3,000 marker, heading for their first weekly loss of the year as the U.S. dollar strengthens. GDX is also heading toward a 5.7% weekly loss of its own. |  | That March seasonality is impressive considering how often rate-cut rhetoric has been the dominant discussion at Fed meetings lately, yet only one cut has been announced this month in the last decade. If the Fed does signal future rate cuts– there's a 54.6% chance the Fed cuts rates in June, per CME's Fed Watch Tool, it would help erase the overdue correction bullion is undergoing this week.
There are two headwinds battling seasonality and momentum. In President Trump's first term, tariffs were more of a negotiation tool and less of an actual policy. The administration has shown greater resolve to actually implement them this time around; this is a big factor in gold's rise the last six months. But if Trump once more reels in the trade war threats, it would be a massive reprieve for markets and dull the appeal of safe-haven assets. Combined with inflation potentially receding, this scenario would mean anyone taking a flier on gold now would have missed the train. Secondly, the U.S. dollar could also spoil gold's rapid rise. The U.S. dollar index (DXY) is lower in 2025 but heading for a weekly win. A firmed-up dollar as the result of tariff pressures could take a great deal of shine out of gold prices.
Since bullion is such a complicated web to untangle, perhaps its more helpful to drill down to individual mining stocks. It's always worth flagging when a company reports relatively upbeat earnings, but the stock moves lower that day, for whatever reason. Newmont is fresh off a fourth-quarter earnings and revenue beat earlier last month, but the stock shed 5.7% in response and has only gained once since then. Sector peer Agnico Eagle Mines Ltd (NYSE:AEM) reported a top-line beat of its own but suffered a post-earnings drawdown of 5.4%. Barrick Gold Corp (NYSE:GOLD) was the only major gold miner to walk out of the earnings confessional with its stock higher, melting up 6.4% on Feb. 12. NEM, AEM, and GOLD all boast similar technical profiles; course-correcting in recent weeks after torrid runs up the charts to start the year.
With inflows into gold still humming and seemingly stable corporate ledgers from industry leaders, this current pullback presents an intriguing entry point for gold mining stocks, heading into a historically bullish month. | | |
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