Alamos Gold Plummets 5.8% Amid Production Woes and Geopolitical Uncertainty – What’s Next for AGI?

Summary
• Alamos Gold (AGI) plunges 5.8% to $40.50, its lowest since January 2024
• Q4 production misses guidance by 12%, citing severe winter weather and operational delays
• RBC analyst maintains $50 price target despite short-term headwinds
• Gold futures flat as Trump’s Iran comments ease safe-haven demand

Alamos Gold’s shares nosedive amid a perfect storm of operational setbacks and sector-wide jitters. The stock’s 5.8% intraday drop to $40.50—its lowest since January 2024—reflects investor anxiety over production shortfalls and geopolitical uncertainty. With the gold sector in flux and key catalysts looming, traders are recalibrating positions ahead of critical guidance updates and expansion studies.

Winter Weather and Operational Hurdles Derail Alamos Gold’s 2025 Performance
Alamos Gold’s 5.8% decline stems from a Q4 production miss of 12% against consensus estimates, attributed to severe winter weather, seismic events, and maintenance delays at its Island Gold and Young-Davidson mines. CEO John McCluskey acknowledged the operational challenges, which dented 2025 output to 545,400 ounces—2.6% below the revised guidance range. While the company reported record revenue of $1.8 billion, the production shortfall and weak guidance triggered a sharp selloff. Analysts at Stifel note the headwinds are 'transitory,' but the immediate market reaction underscores skepticism about near-term execution risks.

Gold Sector Volatility Amplifies AGI’s Downturn as Bullion Prices Ease
The gold sector (GOLD) remains in a bullish technical phase, with bullion prices near record highs despite Thursday’s 0.35% pullback. However, Alamos Gold’s 5.8% drop outpaces the sector’s 0.73% intraday gain, highlighting its vulnerability to operational risks. While gold’s appeal as a safe haven persists amid geopolitical tensions, Alamos’ production issues and high leverage to operational efficiency have isolated it from broader sector strength. The divergence underscores the need for sector-specific analysis when evaluating AGI’s near-term trajectory.

Options Playbook: AGI20260220P35 and AGI20260220P36 Lead the Bearish Charge Amid High Volatility
• RSI (14): 64.41 (overbought territory approached)
• MACD: 1.597 (bullish divergence), Signal Line: 1.406
• Bollinger Bands: Upper $43.59, Middle $40.06, Lower $36.52
• 200D MA: $30.57 (key long-term support)

Technical indicators suggest AGI is in a short-term bearish phase, with RSI near overbought levels and Bollinger Bands signaling a potential retest of the $36.52 lower band. The 200-day moving average at $30.57 remains a critical psychological level. For options traders, the AGI20260220P35 and AGI20260220P36 contracts stand out due to their high implied volatility (45.07% and 46.13%) and liquidity (turnover of 29,834 and 5,921, respectively).

• AGI20260220P35
- Code: AGI20260220P35
- Type: Put
- Strike Price: $35
- Expiration: 2026-02-20
- IV: 45.07% (moderate)
- Delta: -0.1345 (moderate sensitivity)
- Theta: -0.0107 (slow time decay)
- Gamma: 0.0373 (high sensitivity to price swings)
- Turnover: 29,834 (liquid)
- Payoff (5% downside): $0.225 per share
- This put option offers a balanced risk-reward profile, with high gamma amplifying gains if AGI breaks below $36.52. The moderate delta ensures it retains value even in a gradual decline.

• AGI20260220P36
- Code: AGI20260220P36
- Type: Put
- Strike Price: $36
- Expiration: 2026-02-20
- IV: 46.13% (moderate)
- Delta: -0.1863 (moderate sensitivity)
- Theta: -0.0128 (slow time decay)
- Gamma: 0.0451 (high sensitivity to price swings)
- Turnover: 5,921 (liquid)
- Payoff (5% downside): $0.72 per share
- This contract provides higher upside potential if AGI accelerates its decline below $36.52, with a delta that ensures meaningful participation in a bearish move. The 46.13% IV reflects market anticipation of volatility around the February 20 expiration.

If AGI breaks below $36.52, the P35 and P36 puts could see rapid premium appreciation. Aggressive bears may consider a diagonal spread using these contracts to capitalize on a potential $35 support test.

Backtest Alamos Gold Stock Performance
The backtest of AGI's performance after a -6% intraday plunge from 2022 to now shows favorable results. The 3-Day win rate is 59.33%, the 10-Day win rate is 59.78%, and the 30-Day win rate is 68.09%. Additionally, the maximum return during the backtest period was 12.95%, indicating that AGI has the potential to recover from significant intraday declines.

AGI’s Short-Term Bear Case Strengthens – Position for a Test of $35.50 Support
Alamos Gold’s 5.8% drop reflects a confluence of operational setbacks and sector-wide uncertainty. While the company’s record revenue and RBC’s $50 price target offer long-term optimism, the immediate outlook hinges on a retest of the $36.52 Bollinger Band lower bound. A breakdown below $35.50 could trigger a wave of technical selling, aligning with the options data’s bearish bias. Investors should monitor the gold sector leader (GOLD) for directional cues, as its 0.73% intraday gain suggests broader market resilience. For AGI, the path forward demands vigilance on the $35.50 support level—break it, and the bearish case gains momentum.