Gold Mining Stocks Fall Short of Expectations Amid Rising Oil Prices

Gold prices plummeted on September 14, 2026, after attacks on Saudi oil infrastructure and shipping in the Strait of Hormuz drove up oil prices. The price of gold fell by 1.62% to $4,278.25 an ounce, while silver dropped by 2.54% to $62.96.

However, unlike physical bullion, gold mining stocks did not experience a significant decline. In fact, some miners like Newmont and Agnico Eagle fell less than 2% during the comparable selloff on September 11, according to Mining.com.

The article argues that gold mining stocks do not provide direct leveraged exposure to gold prices as previously thought. While it's true that a miner's profit is directly tied to the gold price minus their production costs, there are other factors at play. For instance, miners have finite reserve lives, balance-sheet debt, and permitting liabilities that do not correlate with gold prices.

According to researchers Dirk Baur, Allan Trench, and Lichoo Tay, gold mining shares have historically underperformed physical gold bullion over long horizons. This is because miners constantly reinvest in exploration and acquisition to replace extracted reserves, a process known as the 'reinvestment treadmill.'