Gold Hedges Tech Surge

Gold up as market hedges tech surge

Gold rose 2.2% to US$4,731/oz, as the US$ and yields declined and US employment data remained relatively weak, and the market hedged a continued surge in global tech, even given extreme valuations, and high geopolitical and economic risk.

Large cap gold sector continues strong Q1/26 results

The large gold companies continued to report strong Q1/26 results, with production, revenue and net income, but also costs, all rising substantially for Gold Fields, Anglogold Ashanti, Lundin, Equinox and Iamgold.

Gold stocks outperform equities surge

The gold stocks rose on the gain in the metal price, with the GDX up 8.6% and GDXJ increasing 9.1%, beating even the 4.5% surge in the Nasdaq and significantly ahead of the 2.4% rise in the S&P 500 and 1.8% gain in the Russell 2000 Index.

Gold Hedges Tech Surge

The gold price rose 2.2% to US$4,731/oz as the US$ and yields declined, which both tend to move inversely to the metal. This was driven partly by US jobs data, which while beating expectations, continued to show a weakening of the overall unemployment situation in the country in recent months. While the markets seemed to see this as giving the Fed some support for rate cuts this year, and a major risk-on move into equities continued, there was still some hedging with gold, as the degree of any cuts could still be heavily offset by potential inflation pressures from high oil.

The tech sector led the equity gains, with Nasdaq surging 4.5%, significantly outperforming the already strong 2.4% gain in the S&P 500 and 1.8% rise in the Russell 2000 small cap index. However, the gold stocks outperformed the rise in the broader markets, with the GDX up 8.6% and GDXJ gaining 9.1%. Copper was also strong for the week, with the tech surge implying strong demand for the metal, which rose 7.6%, while iron ore gained 2.6% and aluminum increased just 0.3% after a substantial outperformance over the past three months.

Global tech once again leading the markets in 2026

Global tech is now up 25.6% for the year, and has now even edged ahead of the 23.9% gain in the energy sector, even though the former trades at extreme multiples and the valuations for the latter sector are still quite subdued (Figure 4). While there are increasing concerns that tech could be in a severe bubble, with the sustainability of the AI sector requiring huge continued capex and the potential for profitability still very opaque, the markets continue to ignore these risks. The gold stocks have still performed reasonably well so far this year, up 10.3%, but they still have lagged tech, along with other defensive sectors, with consumer staples up 6.2% and healthcare down -6.3%.

While utilities, up 7.4%, would generally also be considered defensive, it has actually become somewhat of a growth sector on the demand for electricity from tech. The decline in the consumer discretionary sector by -2.5% could be considered a warning signal for the economy, indicating some pressure on broader buying power.

In another significant shift versus recent years, the gains for global tech have not been only driven by the US tech, which is up 18.3% for 2026, below the rise for the global tech sector. This is because the surge this year has been mainly from semiconductors, especially companies based in Taiwan, with the sector up 58.3%, while the software sector has declined -13.2%. Tech in other regions has also been weak this year, with Europe up just 3.0% and China only 0.8%.

Continued strong liquidity could be driving boom

The market boom has likely been largely driven by a continued rise in global liquidity, with the money supply for the US and EU rising this year, and only dipping for Japan (Figure 5). The US Financial Conditions index also shows liquidity continuing a trend of improvement over the past several years, with measures above zero showing tightening and below zero indicating easing (Figure 6).

This in turn has been driven by major central banks, with the US Fed’s balance sheet nearly flat yoy in recent months, after a contraction for several years, and the European Central Bank asset growth also nearing zero after an extended decline (Figures 7, 8). Only the Bank of Japan Bank has seen its assets substantially reduced, and China has been significantly expanding its central bank’s balance sheet over the past two years. This increased liquidity, combined with extreme global risk, with the geopolitical and world trade uncertainty risks having spiked far above the average of recent years, have also been key supports for gold prices (Figures 9, 10).

More strong Q1/26 results released from large gold companies

The Q1/26 results of the big gold companies continued, with Gold Fields, Anglogold, Lundin, Equinox and Iamgold reporting, although Gold Fields only releases production quarterly, and report full-year results for the half. The only gold major still left to report is Barrick, which will have a release over the next week. While gold production growth for several companies that already reported over the past two weeks, including Newmont, Agnico, Kinross and Alamos declined, the group reporting this week all saw increases in output. Gold Fields’ gold production rose 14.9% yoy, Anglogold was near flat, with a 0.6% increase, Lundin was up 2.1%, Equinox saw the strongest gain of 36.0% and Iamgold rose 14.0% (Figure 13).

Combined with the jump in the gold price, this drove strong revenue growth for the group, with Anglogold rising 65% yoy, Lundin 59%, Equinox, 224% and Iamgold 116% (Figure 14). The realized gold price jumped to US$4,604/oz-US$4,951/oz in Q1/26 from a range of US$2,858/oz-US$3,081/oz in Q1/25, or an average increase over US$1,900/oz (Figure 15). There was substantial cost inflation overall for the group, as Q1/25 had a month of higher oil costs, with Q2/25 to be the first full quarter with much higher energy costs. The AISC for Gold Fields rose 13%, for Anglogold, 19%, Lundin, 23% and Iamgold 11%, and only Equinox saw costs decline, by -1% (Figure 16).

However, this increase in costs was far outpaced by the rise in gold, with the realized price to AISC spread increasing to a range of US$2,654/oz-US$3,026/oz in Q1/16 from US$823/oz-US$1,276/oz in Q1/25, except for Lundin, which jumped to US$3,837/oz, from US$2,170/oz, by far the highest of the group, given its very low AISC (Figure 17). The surge in the operational spread lead to major gains in net income, with Anglogold up 189%, Lundin rising 78%, Equinox jumping 511% and Iamgold surging 856% (Figure 18).

Major producers and most of TSXV gold rise

The major producers and most of TSXV gold rose on the gain in the gold price (Figures 19, 20). For the TSXV gold companies operating mainly domestically, Artemis reported Q1/26 operational results, Osisko Dev. appointed a new VP, New Found reported drill results from Queensway and Amex announced a private placement (Figure 21). For the TSXV gold companies operating mainly internationally, Mako reported drill results from the Candelaria Zone of Las Conchitas South, Gold Reserve formed the American Heralds Mining Company to potentially spin-out its Venezuela assets and Gold X2 provided an update on its planned 160,000k exploration program at Moss (Figure 22).