Commodity mining ETFs, which topped global exchange-traded fund (ETF) return rankings from late last year through early this year, have posted steep declines recently. As commodity prices halted their surge and profit-taking emerged, gold, silver, and lithium mining ETFs recorded double-digit losses over the past three months. Only the copper mining ETF managed a positive return, showing relatively firm performance.
According to Koscom's ETF CHECK on the 9th, the WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN), which invests in both gold futures and gold mining company stocks, posted a three-month return of -28.46% as of the 7th of this month. Over the same period, the Global X Gold Explorers ETF (GOEX), centered on gold mining stocks, also plunged 19.38%. The one-year returns for GDMN and GOEX remain high at 46.57% and 56.21%, respectively, but short-term performance has sharply reversed as selling emerged following the early-year surge.
Mining companies are a sector in which gold price movements are reflected in earnings in a leveraged form, so they tend to show larger declines during corrections. Analysts note that gold price movements are directly reflected in selling prices and corporate profitability, and that profit-taking pressure has grown because mining stocks and international gold prices had risen sharply since last year.
International gold prices hit a record high above $5,595 per ounce in intraday trading in January this year before gradually declining, and at the end of last month fell below the $4,000 line. Investment banks (IBs) are maintaining their long-term bullish outlook for gold prices while reflecting the possibility of a short-term correction in their forecasts. JPMorgan recently sharply lowered its fourth-quarter gold price target this year to $4,500 from about $6,000, citing slowing buying in major demand segments and renewed sensitivity to real interest rates.
Silver mining ETFs showed a similar trend. The iShares MSCI Global Silver and Metals Miners ETF (SLVP), which invests in global silver and metal mining companies, posted a three-month return of -16.42%, while the Amplify Junior Silver Miners ETF (SILJ), with a high proportion of small- and mid-cap silver miners, recorded -17.22%. The one-year returns for the two ETFs reached 71.57% and 67.86%, respectively, but as with gold, the correction widened following the surge. Silver prices rose about 150% last year, a higher rate than gold, and continued their strength into early this year, leading to assessments that short-term valuation pressure has grown.
Among industrial metals, copper and lithium diverged. The Sprott Junior Copper Miners ETF (COPJ), which has drawn attention as a beneficiary of expanding AI data center and power grid investment, rose 0.15% over the past three months, the only positive return among major commodity mining ETFs. Although COPJ is an ETF with a higher proportion of small- and mid-cap mining companies at the development and exploration stage rather than large mines, it proved its defensive strength as expectations for structural growth in copper demand from expanded AI infrastructure investment continued.
By contrast, the Sprott Lithium Miners ETF (LITP), which had surged more than 100% over the past year investing in lithium mining companies, was weak at -12.56% over three months and -14.15% over one month. The sharp swing in short-term returns is interpreted as reflecting a combination of increased supply from new mine development and concerns over delayed recovery in electric vehicle demand. Park Sung-bong, an analyst at Hana Securities, said, "Lithium prices are likely to show initial weakness due to the impact of expanded new supply in the second half, but from the end of the third quarter, entry into the electric vehicle peak season and expanded installation of energy storage systems (ESS) will support price increases."
