Happy Tuesday, GoldBuzzers!

Gold and silver both took a beating last week, but Monday's session was dead calm. That probably won't last. The Fed meets Wednesday, oil is back above $107, and the Middle East situation is getting messier by the day.

Let’s get into it. ⬇️

Gold finished Monday falling under $4,700 an ounce, and silver held around $75.50, both metals treading water after last week's sharp losses (gold down 2.5%, silver off more than 6%). The session was all about headlines from the Middle East. Gold dipped early after Trump cancelled a planned envoy trip to Islamabad for Iran negotiations, then bounced when reports surfaced that Tehran had sent a new proposal through Pakistani mediators to reopen the Strait of Hormuz.

The catch: Iran's offer reportedly sidesteps the nuclear issue entirely, kicking that can down the road until the US lifts its blockade. Washington isn't going to bite on that, so the standoff continues into its ninth week.

Brent crude topped $107 before pulling back to around $106, with the IEA now calling this the biggest energy supply shock on record. That's keeping inflation fears alive and putting central banks in a tight spot.

On that front, the Fed announces tomorrow in what could be Jerome Powell's final meeting as chair before Kevin Warsh takes over in May. The ECB, Bank of England, and Bank of Japan all meet later in the week too. Rate changes are off the table across the board, but any shift in tone on inflation could move metals fast. A surging dollar (which hit 99.3 intraday before easing back to 98.3) kept a ceiling on both gold and silver all session.

Newmont reported their Q1 results last Thursday. Revenue of $7.31 billion against a Zacks consensus of $6.36 billion, a 15% beat. Adjusted earnings of $2.90 per share against expectations of $2.07, a 40% beat. Adjusted EBITDA of $5.2 billion, nearly double the year-ago quarter. And the headline number that does the most work: a record $3.1 billion in free cash flow generated in a single quarter.

The stock initially responded the way you'd expect, up roughly 8% on the week through Friday's close. Meaningful for a $130 billion company, but only briefly. By midday Monday, NEM had given back almost half of that gain, amidst continuing sector uncertainty.

The single most important figure on Newmont's release was the realised gold price: $4,900 per ounce. Their all-in sustaining cost was $1,029 per ounce. That's a margin of nearly $3,900 on every ounce produced. Multiply across 1.3 million attributable ounces of gold in the quarter, plus 30,000 tonnes of copper and 9 million ounces of silver as byproducts, and you get to the $3.1 billion free cash flow number without any operational miracles. This is what operating leverage looks like at a major gold producer when gold is moving.

The capital return story matters too. Newmont returned $2.7 billion to shareholders through buybacks and dividends since their last earnings call in February. The board then approved another $6 billion repurchase authorisation, on top of the $6 billion they just finished executing. Twelve billion dollars of buyback intent over roughly twelve months from a single company. Read it as management's view of where their share price sits relative to the cash generation they expect to keep producing.

That's the read on Newmont specifically. What happens with the rest of the sector is the real question.

Why this week matters

Kinross reports tomorrow after market close. Agnico Eagle reports Thursday after close, with their call Friday morning. Barrick follows on May 11. Three more majors, three more data points on whether Newmont's quarter is a Newmont story or a sector story.

The setup suggests it's a sector story. Agnico's full-year 2025 results, reported in February, showed roughly 95% margin capture on the 2025 gold price rally, meaning almost every dollar of higher gold prices flowed straight to free cash flow rather than being absorbed by rising costs. Their full-year 2025 free cash flow was a record $4.4 billion, on AISC of $1,339 against gold prices that averaged $3,453, well below this quarter's $4,900 print. If their cost discipline held into Q1, the math should work out similarly to Newmont's.

In my view, Kinross is more interesting because it's the smallest of the three majors and has historically traded at a discount to Newmont and Agnico on quality concerns. However, it scores highly in our INSIDER rankings of 25 Gold Majors, and if it posts a similarly leveraged quarter, that's a signal the operating leverage thesis isn't just about the highest-quality assets. It's about the whole sector.

The numbers to watch: realised gold price, AISC, and free cash flow per ounce. Production matters less than usual right now because the price-to-cost spread is doing all the heavy lifting. Anyone who held production roughly flat at current gold prices is generating cash at rates the sector hasn't seen in a generation.

The divergence

The gap between what the miners are producing financially and where their stocks actually trade has been the defining feature of this cycle.

GDX is down roughly 5% over the past two weeks and about 20% from its late-January peak, even as gold itself has held in the $4,700 range. Monday made the dynamic obvious: sector-wide selling continued straight through Newmont's blowout, with NEM giving back more than peers as the post-earnings premium unwound. Gold has been making new highs while the companies digging it out of the ground trade like the gains aren't going to last.

Newmont's Q1 is the first concrete piece of evidence that the financial reality has diverged from the price action. If Kinross and Agnico confirm the picture this week, that gap has to close one way or the other. Either the metal sells off and brings the miners back into line at the bottom, or the miners catch up to what gold is doing.

Two big earnings reports this week. Watch the same numbers each time. By Friday morning, the story will be a lot clearer.

That’s all for this Tuesday, folks. See you on Thursday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com