Newmont Plunges 5.7% as Gold and Silver Selloff Ignites Profit-Taking Panic

Summary
• Newmont (NEM) tumbles 5.7% to $99.71, hitting an intraday low of $97.67 amid a broader precious metals rout.
• Analysts remain split, with UBS and RBC raising price targets to $125 and $120, while BNP Paribas cuts its rating to Neutral.
• Gold and silver prices collapse 4.3% and 7.6% respectively, triggering a sector-wide selloff.

Newmont’s sharp decline mirrors a chaotic reversal in the precious metals trade, as traders unwind positions after record highs. The stock’s 5.7% drop—despite a Raymond James upgrade—highlights fragile sentiment in a market grappling with overbought conditions and thin liquidity. With gold and silver both retreating from multi-year peaks, the question looms: Is this a buying opportunity or a warning sign for miners?

Precious Metals Profit-Taking Drives Newmont's Sharp Decline
Newmont’s 5.7% intraday plunge is directly tied to a global selloff in gold and silver, which collapsed after surging to record highs. Silver’s 11% drop—the largest intraday decline since 2020—sparked panic-driven profit-taking, exacerbated by thin end-of-year liquidity. While Newmont’s fundamentals remain robust (16x P/E, 1% yield), the stock is collateral damage in a sector where gold equities like Barrick and Agnico Eagle also fell over 6%. Analysts note the move is not tied to Newmont-specific risks but reflects a broader unwind of speculative bets in metals, fueled by China’s silver export licensing plans and overbought technical conditions.

Gold Sector Sinks Amid Global Precious Metals Retreat
The Gold sector, led by the Gold.com index (GOLD), fell 3.5% intraday, amplifying Newmont’s decline. The sector’s weakness is rooted in the same profit-taking that battered gold and silver, with thin liquidity amplifying volatility. Newmont’s 5.7% drop outperformed the sector’s 3.5% decline in magnitude, suggesting its exposure to gold prices (which drive 70% of its revenue) made it particularly vulnerable. While the sector’s technical indicators (RSI overbought, Bollinger Bands near lower bound) suggest a potential rebound, near-term momentum remains bearish.

Bearish Options and ETFs Emerge as Strategic Plays Amid Volatility
• 200-day average: $69.35 (far below current price)
• 52W range: $37.68–$106.34 (current price near 52W high)
• RSI: 82.46 (overbought)
• MACD: 4.54 (bullish), Signal Line: 3.75, Histogram: 0.79 (rising)
• Bollinger Bands: Upper $108.49, Middle $96.83, Lower $85.18 (price near lower band)

Newmont’s technicals suggest a short-term bearish bias, with key support at $97.67 and resistance at $101.43. The RSI’s overbought condition and Bollinger Bands’ lower-bound proximity indicate a potential pullback. For options, two contracts stand out:

• NEM20260102P93 (Put, $93 strike, 2026-01-02):
- IV: 40.96% (moderate)
- Leverage: 664.47%
- Delta: -0.028 (low sensitivity)
- Theta: -0.0184 (slow time decay)
- Gamma: 0.028 (moderate sensitivity)
- Turnover: 2,075
- Payoff at 5% downside (94.72): $0.72 per contract. This put offers high leverage for a modest price drop, with decent liquidity.

• NEM20260102P95 (Put, $95 strike, 2026-01-02):
- IV: 38.26% (moderate)
- Leverage: 321.52%
- Delta: -0.135 (moderate sensitivity)
- Theta: -0.0086 (slow decay)
- Gamma: 0.0486 (high sensitivity)
- Turnover: 8,501
- Payoff at 5% downside (94.72): $0.28 per contract. This put benefits from high gamma, making it responsive to price swings.

Action: Aggressive bears may consider NEM20260102P93 for a 5% downside scenario, while NEM20260102P95 offers a safer, lower-leverage play. Both contracts are liquid and well-positioned for a near-term pullback.

Backtest Newmont Stock Performance
The backtest of NEM's performance after a -6% intraday plunge from 2022 to now shows favorable short-term gains, with the 3-Day win rate at 52.51%, the 10-Day win rate at 55.44%, and the 30-Day win rate at 56.07%. Although the maximum return during the backtest was only 3.05% over 30 days, the consistent positive returns suggest that NEM has the potential to recover from such significant dips.

Newmont’s Correction: A Buying Opportunity or a Warning Shot?
Newmont’s 5.7% drop, while painful, may represent a short-term overreaction to a broader metals selloff rather than a fundamental shift in its business. With gold and silver stabilizing from their intraday lows and analysts like UBS maintaining bullish price targets, the stock’s 16x P/E and 1% yield remain attractive. However, technical indicators (overbought RSI, Bollinger Bands near lower bound) suggest caution. Investors should monitor the $97.67 support level and the Gold.com index’s -3.5% move. Act now: If $97.67 holds, consider NEM20260102P93 for a bearish hedge; if the sector rebounds, Newmont’s 52W high of $106.34 could retest resistance.