Markets
VanEck gold miners fund jumps as Iran offers faster Hormuz plan
Gold miners and rate-sensitive stocks rallied Monday after Iran offered a quicker Hormuz reopening on steep terms, pulling oil prices and long-term Treasury yields lower.
Quick Read
- The VanEck Gold Miners ETF jumped 2.7% after Iran offered to reopen the Strait of Hormuz within days on its own terms.
- Oil fell, with West Texas Intermediate down to $96.63 a barrel, and the 10-year Treasury yield fell 3 basis points.
- Homebuilders and regional banks rallied, while the energy sector fund tumbled 4.0%.
- Iran's conditions include lifting the U.S. naval blockade, so the offer is not yet a deal.
Why did gold miners rise on Monday?
The VanEck Gold Miners ETF (NYSE Arca: GDX) jumped 2.7% on Monday and closed at $79.15. An ETF is a fund that trades on an exchange like a stock. This one holds gold mining companies, and it added $630 million in market value.
Why it matters: The trigger came from Tehran. Iran said it could reopen the Strait of Hormuz within days if Washington agrees to its conditions. Iranian Foreign Minister Abbas Araghchi credited Qatari mediation for the quicker timetable, The Middle East Letter said in a post on X.
By the numbers: Gold itself moved too. The GLD gold fund jumped 1.6%. Gold pays no interest. When bond yields, the yearly interest bonds pay, fall, gold can look better next to bonds.
How did oil and bonds react?
Crude prices fell hard on the offer. West Texas Intermediate, the main U.S. oil benchmark, fell to $96.63 a barrel by mid-afternoon in New York. Brent, the global benchmark, dropped to $104.77.
The 10-year Treasury yield fell 3 basis points to 4.91%. A yield is the yearly interest a bond pays, measured against its price. Yields move opposite to bond prices.
The chain matters for your money. Costlier oil had stoked inflation worries and lifted Treasury yields. Higher yields pushed up mortgage rates and kept buyers away. The 10-year yield has climbed about 95 basis points since the war began in late February.
Which other stocks and funds moved on the news?
Companies hurt most by high borrowing costs led the gains. Homebuilders, regional banks and airlines all rallied. The consumer discretionary sector fund jumped 2.4%, and the financial sector fund gained 1.9%. The real estate sector fund rose 1.1%.
Energy went the other way. The energy sector fund tumbled 4.0% as crude lost ground.
The broad market was split. Among the stocks tracked, 666 rose and 426 fell. Still, the S&P 500 fell 0.5%, and the Nasdaq-100 slid 1.4%. The technology sector fund slid 2.9%. The Dow rose 0.4%.
What could undo the rally?
Iran's offer carries steep conditions. Tehran wants the U.S. naval blockade lifted and American forces cut back to pre-war levels. Monday's moves reflected an offer, not an agreement.
Short-term rates did not follow long ones down. The 2-year Treasury yield rose 3 basis points to 4.59%. The 3-month bill yield rose 5 basis points.
The miners fund also has ground to recover. It remains 31.7% below its 52-week high of $115.84, the top price of the past year.
What could move gold miners next?
The big open question is whether Washington accepts Iran's terms. A U.S. response could decide whether cheaper oil lasts.
The economic calendar offers its own tests. The September job openings survey is due Tuesday, Nov. 3, at 10 a.m. ET. The October jobs report follows on Friday, Nov. 6, at 8:30 a.m. ET.
The October consumer price index, the monthly government report on the prices people pay, arrives Tuesday, Nov. 10, at 8:30 a.m. ET. It may show whether lower oil prices are starting to ease the inflation that pushed yields higher.
For readers
What it could mean for you: If you are shopping for a home loan or weighing a refinance, this story reaches you through the bond market. Lenders tend to set 30-year fixed mortgage quotes off the 10-year Treasury yield. That yield fell 3 basis points on Monday, a small step next to its climb of about 95 basis points since late February. If cheaper oil keeps easing inflation worries, mortgage quotes could drift lower. If the Hormuz talks stall, the yield may climb back, and quotes could follow it.
Questions and answers
Why did gold mining stocks go up on Monday?
Iran offered to reopen the Strait of Hormuz within days, which pulled oil prices and long-term Treasury yields lower. Gold pays no interest, so lower yields can make it more appealing. The VanEck Gold Miners ETF jumped 2.7%.
What does Iran want in exchange for reopening the Strait of Hormuz?
Iran wants the U.S. naval blockade lifted and American forces reduced to pre-war levels. The Middle East Letter said in a post on X that Foreign Minister Abbas Araghchi credited Qatari mediators for the faster plan.
How could the Hormuz news affect mortgage rates?
Mortgage quotes tend to follow the 10-year Treasury yield, which fell 3 basis points to 4.91% on Monday. That yield has climbed about 95 basis points since late February, so a lasting drop could take more than a day.
When is the next U.S. inflation report?
The October consumer price index is due Tuesday, Nov. 10, at 8:30 a.m. ET. It may show whether lower oil prices are easing inflation.
The numbers
| VanEck Gold Miners ETF (GDX) price | $79.15 |
|---|---|
| VanEck Gold Miners ETF (GDX) change | +2.67% |
| VanEck Gold Miners ETF (GDX) market value | $24 billion |
| VanEck Gold Miners ETF (GDX) 52-week high | $115.84 |
| S&P 500 change | −0.51% |
| 10-year Treasury yield | 4.91% |
Monday’s close
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Not investment advice.
