By Paulo Trevisani
Stocks of companies mining high-flying metals started the last week of 2025 with a sharp decline, as a remarkable rally on gold, silver and copper prices this year took a break.
"We believe today's pullback is healthy for both metals," Peter Cardillo, chief market economist at Spartan, wrote in a daily market analysis about gold and silver. "We suspect this mini downtrend may last a day or two before a reversal to the upside begins."
Adding downward pressure on the commodities, exchange operator CME Group raised margin requirements in a range of metals contracts as part of "normal review of market volatility," the firm said on Friday. The change took effect Monday.
The Materials sector led a decline in the S&P 500 Monday, falling 1% while the broader index was down 0.4%. A major constituent of the index, Newmont Co., fell 5.8%. Other miners also fell. Barrick was down 4.3%, Freeport-McMoRan slipped 2.3% and Southern Copper Corp. declined 2.8%.
The decline tracked weakness in metals. Silver was down 6.7%, gold 4.4% and copper was falling 4.6%.
Some analysts chalked up the downswing to profit taking after a stellar year. Even accounting for Monday's drop, silver is still up a whopping 147% this year, gold is up 65% and copper is up 39%. The Materials sector, which includes steelmakers, petrochemicals and other companies besides miners, is gaining a more modest 9% -- but Newmont and Barrick are experiencing triple-digit stock price increases.
Silver is drawing particular attention, as the fast expansion of data centers boosts demand for the highly conductive metal.
"There is no doubt that there is [strong] demand for Silver in the data space," Mizhuo's Robert Yawgler wrote. He said the rally is also fuelled by speculation, adding that it remains to be seen if Monday's decline is the harbinger of a lasting downward shift. "It will be interesting to see if the bearish engulfing pattern pans out in coming days. It is a classic formation."
Gold can also have some traction in coming months.
"Expectations of increased purchases by central banks, hopes of interest rate cuts and geopolitical tensions" are among the potential drivers for an extended strength in gold prices, according to a Monday report by Zacks Investment Research on Newmont. "Higher gold prices are expected to continue to drive the company's performance," Zacks says.
Global trends offer support to copper, which is widely used in electric cables.
Freeport-McMoRan is "well-positioned to benefit from automotive electrification, which is positive for copper," according to a Zacks analysis. Copper demand is also supported "by U.S. infrastructure spending and the global shift toward clean energy," the firm says in a separate report.
Alexander Osipovich contributed to this article.
Write to Paulo Trevisani at paulo.trevisani@wsj.com.
(END) Dow Jones Newswires
December 29, 2025 16:48 ET (21:48 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
