Newmont Stock And Gold ETFs Facing Fresh Fed Pressure

Fed policy is back at the center of the market story, and gold and silver stocks are feeling the pressure. With Chairman Kevin Warsh taking a hawkish tone, higher real yields and uncertainty around upcoming CPI data and the July FOMC meeting are weighing on non yielding assets and related equities. For investors, this is a moment to reassess which exposures might struggle if rate expectations stay firm or move higher. This article looks at 3 stocks tied closely to these gold and silver themes, all of which appear more at risk under the current Fed backdrop.

Overview: Newmont is one of the world’s largest gold producers, mining and exploring for gold and other metals such as copper, silver, lead, and zinc across operations spanning the U.S., Canada, Latin America, Africa, and the Asia Pacific region.

Operations: Newmont generates revenue across a broad portfolio of mines, with major contributors including NGM at about US$4.1b, Peñasquito at US$3.8b, Cadia at US$2.5b, Ahafo South at US$2.3b, Boddington at US$2.3b, Yanacocha at US$2.2b, and Lihir at US$2.1b, alongside several smaller assets.

Market Cap: US$98.6b

Newmont sits right in the crosshairs of the current Fed story, and that is exactly why investors may pay attention. As a large, global gold producer, its earnings are heavily exposed to weaker gold prices at a time when higher real rates and a hawkish Fed are pressuring the metal and squeezing non yielding assets. Recent commentary from management also flags inflation and cost pressures, while several key mines face lower grade phases and higher sustaining capex, which could strain margins if pricing stays soft. Even with solid profitability metrics and a large buyback program, the stock’s appeal now rests on how it handles this mix of macro headwinds, asset quality questions, and execution risk at projects like Red Chris and other core operations.

Newmont’s story now looks less about size and more about pressure, with softer gold prices, higher sustaining capex and grade issues potentially squeezing future cash flows. As a result, the analysis report for Newmont may highlight what many investors are still missing.

Overview: SPDR Gold Shares (GLD) is a physically backed exchange traded fund that holds gold bullion and aims to mirror the price of gold, giving investors a liquid way to gain direct exposure to moves in the gold market without owning and storing the metal themselves.

Market Cap: US$135.7b

SPDR Gold Shares sits right at the fault line of the current Fed story, because its performance is tied almost entirely to spot gold at a time when higher real yields and a hawkish Kevin Warsh Fed are pressuring non yielding assets. GLD screens attractively on some backward looking metrics, including a low P/E multiple relative to the US Capital Markets industry and high reported ROE of 30.7%. However, its earnings are heavily influenced by non cash items and it reports negligible revenue, which makes those figures harder to interpret. With funding entirely reliant on higher risk external borrowing and gold exposed to further selling if upcoming CPI data or the July FOMC meeting keep tightening expectations elevated, GLD is a product investors may want to scrutinize more closely before treating it as a simple safe haven.

GLD’s story hinges on risk that many investors may be glossing over, with a low P/E and high ROE shaped by negligible revenue and non cash items. Before treating it as a straightforward safe haven, read the full analysis report for SPDR Gold Shares

Overview: iShares Gold Trust (IAU) is an exchange traded fund that holds physical gold bullion and is designed to track the daily price of gold, giving you a straightforward way to get exposure to moves in the gold market without having to buy, store, or insure bars yourself.

Market Cap: US$60.8b

iShares Gold Trust looks interesting on the surface, with very strong reported earnings growth, a high 32% ROE, and a market value that screens at a steep discount to some valuation models, yet the picture is far less comforting once you look closer. Revenue is effectively zero, all liabilities come from higher risk external funding, and earnings quality is clouded by a heavy use of non cash items, which makes those headline metrics harder to rely on. In addition, some analysts highlight the impact of a firmly hawkish Fed and rising real rates that can pressure non yielding gold, along with the risk of further outflows if CPI or the next FOMC meeting keep tightening fears alive. Taken together, these factors can make IAU appear to be a gold vehicle that carries more structural and macro risk than many investors may realize.

iShares Gold Trust’s strong ROE and earnings growth may be masking how reliant it is on non cash items and higher-risk funding. Before you lean on IAU as a gold proxy, read the analysis report for iShares Gold Trust

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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