Gold and silver miners are taking a breather after an explosive 2025 rally, and the sharp pullback has retail traders and institutional investors alike wondering whether this is just a healthy correction — or the end of the road.
The VanEck Gold Miners ETF (NYSE:GDX), which had skyrocketed 147% year-to-date through Oct. 16, has since plunged 16%.
Newmont Corp. (NYSE:NEM), the world's largest gold miner, followed a similar path: up 158% through mid-October, now down more than 20% from its peak.
The Global X Silver Miners ETF (NYSE:SIL) mirrored the trend, down nearly 20% after a 150% year-to-date surge.
This drop hasn't happened in isolation. Spot gold fell from an all-time high of $4,380 to below $4,000, while silver collapsed from $54.45 to $47 — erasing months of gains in less than 10 sessions.
Chart: Traders Watch Gold Miners Closely After Sudden 20% Pullback
Wall Street Is Still Bullish On Gold — Here’s Why
Despite the correction, several Wall Street analysts remain confident in gold's long-term trajectory.
Michael Widmer, strategist at Bank of America, reaffirmed his bold call this week for gold to hit $5,000 in 2026, indicating that structural macroeconomic forces still favor higher prices.
Widmer said the current sell-off is a "classic" correction after an overbought phase, but doesn’t change the broader bull thesis.
According to Widmer, past bull markets — from the 1970s oil crisis to the post-COVID rebound — show that "gold prices stopped pushing higher only once the underlying drivers changed."
In 2025, those drivers include sustained U.S. fiscal deficits, central bank diversification away from the U.S. dollar and increased market uncertainty under the Trump administration's unconventional macro policies.
Another factor? A shift in portfolio allocation thinking. With traditional 60:40 stock-to-bond portfolios struggling to deliver returns amid rate volatility, analysts are increasingly recommending 60:20:20 allocations — with 20% in alternative assets like gold.
According to Widmer, gold still accounts for just 5% of global investment relative to equities and fixed income — meaning it remains under-owned.
Technical Indicators Signal Opportunity
Some investors believe this is a textbook entry point for the high-beta mining sector.
Analyst Oliver Groß, writing on X , called it a "healthy correction," noting that miners flipped from overbought to oversold in a matter of days — a common trait in volatile commodity equities.
Gold bug Peter Schiff echoed that sentiment, saying, "With gold trading below $4,000, gold stock investors are dumping their shares as if the bull market is over. The GDX is trading where it was when gold was $350 lower than it is now."
Even the numbers back it up: Historical analysis from Subutrade.com shows that when gold falls more than 10% in a week — like it did this October — it tends to rebound sharply.
Looking at the 10 previous instances since 1980, gold posted positive 2-month returns 100% of the time, with an average gain of 8.4%.
| Date of Drop | 1 Day Later | 1 Week Later | 1 Month Later | 2 Months Later |
|---|---|---|---|---|
| Jan 29, 1981 | +2.58% | +0.96% | -0.96% | +6.63% |
| Jul 2, 1981 | 0.00% | -1.99% | -2.05% | +3.02% |
| Sep 30, 1982 | +1.26% | +5.42% | +6.55% | +9.32% |
| Feb 28, 1983 | +1.35% | +2.99% | +1.03% | +6.29% |
| Jun 13, 2006 | -0.62% | +2.40% | +17.21% | +12.39% |
| Oct 16, 2008 | -2.83% | -10.50% | -7.89% | +6.49% |
| Sep 26, 2011 | +1.39% | +2.04% | +4.70% | +4.03% |
| Apr 15, 2013 | +1.11% | +5.35% | +5.37% | +2.42% |
| Jun 26, 2013 | -2.08% | +2.12% | +8.82% | +14.62% |
| Mar 19, 2020 | +1.88% | +10.44% | +15.18% | +18.65% |
| Average | +0.40% | +1.92% | +4.80% | +8.39% |
| % Positive | 60% | 80% | 70% | 100% |
What If The Gold’s Rally Is Really Over?
Yet not everyone is buying the dip.
Robin Brooks, former chief economist at the Institute of International Finance, thinks the gold rally could be overdone.
Writing after the IMF and World Bank meetings, Brooks noted how many policymakers and investors see the latest gold surge as a bubble, disconnected from current fundamentals.
Brooks said the narrative of dedollarization and fiscal panic is "old news" and doesn't fully explain why gold spiked 30% after Fed Chair Jerome Powell's dovish speech at Jackson Hole.
"My best guess is that investors will upgrade their U.S. growth view," Brooks said. "That's a cyclical upgrade that can put a stop to the massive rise in gold prices."
If the market begins pricing out Fed rate cuts in 2026, gold’s rally may lose one of its key legs.
Bottom Line
The sharp correction in gold and silver miners has jolted a red-hot trade that dominated headlines through much of the year, but history, positioning and macro forces suggest the pullback may be more pause than collapse.
For now, the real test lies ahead: will markets continue to price in stronger U.S. growth and fewer Fed cuts, or will macro uncertainty once again revive demand for hard assets?
Either way, gold is back in focus — and the next move could define how this historic rally ends… or resumes.
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Image created using artificial intelligence via DALL-E.
