Gold and silver miners have been the punching bag of the war in Iran. The VanEck Gold Miners ETF (NYSE:GDX) has dropped roughly 17% between the Feb. 27 close and the May 6 close, while the S&P 500 has carved out fresh records over the same window.
The setup that opened on Wednesday is the mirror image of the one that broke them. As ceasefire and Strait of Hormuz reopening odds rise, GDX rallied 7% and the Global X Silver Miners ETF (NYSE:SIL) soared 9% on reports of a looming U.S.-Iran one-page memorandum that could restore oil flows through the chokepoint.
| Industry | ETF | Performance Since Start Of Iran War |
|---|---|---|
| Gold Miners | VanEck Gold Miners ETF (NYSE:GDX) | -20.20% |
| Homebuilders | iShares U.S. Home Construction ETF (BATS:ITB) | -11.35% |
| Healthcare Equipment | SPDR S&P Health Care Equipment ETF (NYSE:XHE) | -9.82% |
| Water Resources | Invesco Water Resources ETF (NASDAQ:PHO) | -5.67% |
| Aerospace & Defense | SPDR S&P Aerospace & Defense ETF (NYSE:XAR) | -5.54% |
| Airlines | U.S. Global Jets ETF (NYSE:JETS) | -4.25% |
| Insurance | SPDR S&P Insurance ETF (NYSE:KIE) | -3.06% |
| Retail | SPDR S&P Retail ETF (NYSE:XRT) | -2.12% |
| Agribusiness | VanEck Agribusiness ETF (NYSE:MOO) | -1.59% |
Why Miners Cracked During The Hormuz Crisis
Miners got squeezed by a brutal double shock. Surging oil prices lifted production costs at the same time falling gold prices compressed revenue per ounce.
Think of a bakery whose flour bill doubles in the same month bread prices fall: margin gets crushed from both ends.
That is exactly what unfolded between late February and early May. Brent ran to $115 a barrel on the Hormuz disruption, fueling diesel costs that show up in every haul truck, mill and dewatering pump on a mine site.
Gold, after touching record highs in January, retraced as the Federal Reserve held rates and traders priced a longer “no-cuts” regime to fight the war-driven inflation pulse.
The result is a divergence rare in modern cycles.
Gold itself sold off less than 15% from its January peak, but the equity expression of gold collapsed by 20%. That is the operating leverage of mining, cutting the wrong way.
The Reopening Math, In Reverse
A reopening of the Strait of Hormuz runs the squeeze backwards. Lower oil collapses the cost line. Easier inflation reopens the path to Federal Reserve rate cuts, which historically lifts gold via a weaker dollar and lower real yields. Both legs work in the miners’ favor at the same time.
The silver leg is even sharper. Two months of disrupted shipping crushed industrial silver demand, the largest single category for the metal.
A reopening doesn’t just lower oil.
It restores the manufacturing activity that consumes silver in solar cells, electronics and batteries.
The 20 Worst-Performing Miners Since The War Began
According to Benzinga Pro‘s movers, these are the 20 worst-performing mining names with market caps above $2 billion since the Feb. 27 close.
| Company (Ticker) | Change % |
|---|---|
| First Majestic Silver Corp. (NYSE:AG) | −33.83% |
| Americas Gold and Silver Corp. (NYSE:USAS) | −33.71% |
| Endeavour Silver Corp. (NYSE:EXK) | −33.02% |
| Orla Mining Ltd. (NYSE:ORLA) | −32.61% |
| Novagold Resources Inc. (NYSE:NG) | −32.21% |
| Eldorado Gold Corp. (NYSE:EGO) | −31.80% |
| Coeur Mining Inc. (NYSE:CDE) | −30.94% |
| Fortuna Mining Corp. (NYSE:FSM) | −27.96% |
| B2Gold Corp. (NYSE:BTG) | −27.27% |
| Hecla Mining Co. (NYSE:HL) | −27.14% |
| DRDGold Ltd. (NYSE:DRD) | −25.01% |
| Iamgold Corp. (NYSE:IAG) | −24.70% |
| Agnico Eagle Mines Ltd. (NYSE:AEM) | −24.56% |
| Sibanye Stillwater Ltd. (NYSE:SBSW) | −24.11% |
| Equinox Gold Corp. (NYSE:EQX) | −23.40% |
| International Paper Co. (NYSE:IP) | −23.03% |
| Harmony Gold Mining Co. (NYSE:HMY) | −22.95% |
| Suzano S.A. (NYSE:SUZ) | −22.86% |
| Seabridge Gold Inc. (NYSE:SA) | −22.85% |
| AngloGold Ashanti plc (NYSE:AU) | −22.83% |
What It Means For Investors
The miners trade has been the consensus loser of the Iran war. That consensus is now the variable.
If the Hormuz blockade lifts, oil retreats and the Federal Reserve regains permission to cut, the same operating leverage that crushed mining margins on the way down works in reverse on the way back up.
The risk is symmetric.
Two prior peace signals have already been reversed, and Iran rejected the U.S. 15-point plan before the latest one-page memo emerged. A failed deal sends oil back above $100, hardens the Fed and resumes the squeeze that built this list in the first place.
Photo by Dodi Dharmanto via Shutterstock
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