Key Takeaways:
Gold and silver miners jumped 14% this week, with the Philadelphia Gold and Silver Index closing at 422.12 points, as bullion's advance lifted the sector.
"The market has been asleep on something and just woke up," Frank Holmes, chief executive of U.S. Global Investors, wrote in an op-ed. "In this case, I believe it's the second one," he said, referring to a sector awakening rather than a broken market.
The NYSE Arca Gold Miners Index climbed 3.08% to 2,953.03 points, capping a 14.22% weekly gain. Southern Copper rose 8.7% to a record closing high, while Freeport-McMoRan advanced 7.7%, its best single-day performance since April 2025. The State Street Metals & Mining ETF added 4.05% to $119.34, its highest since June, and the raw materials index gained 2.44% to 259.25 points for a 3.39% weekly rise. The metals and mining index slipped 0.13% for the week despite a 3.18% daily gain.
The rally came even as gold's biggest headwind strengthened. The 10-year real yield sits near 2.43%, up roughly 75 basis points since February, yet bullion still climbed more than 7% in the week ending Aug. 7, according to Holmes. A weaker U.S. dollar helped, but the rate backdrop did not cooperate. Investor positioning remains restrained: managed money held 123,586 net long gold contracts at the end of July, down 43% from 215,567 in February 2025, even as gold traded near $4,038, roughly 40% higher. Holmes said the divergence points to buyers who are not chasing the trade, including central banks and investors seeking protection from eroding purchasing power.
The miners' outperformance relative to bullion is notable. In the week ending Aug. 7, the NYSE Arca Gold Miners Index rose more than 20%, one of its strongest weeks since the index launched, while gold gained about 7%. Holmes, who has spent four decades in the business, said such a move usually signals either a broken market or a sector waking up after being overlooked. He pointed to miners generating significantly more cash flow, expanding margins and taking a more disciplined approach to capital allocation.
With those fundamentals improving, Holmes argued the sector may only now be waking up. A continued rally in bullion, supported by restrained speculative positioning, could draw further inflows into mining equities and related exchange-traded funds in coming weeks, extending the sector's gains beyond the metal itself.
This article is for informational purposes only and does not constitute investment advice.
