Why Goldgroup Mining Tumbled Today
Why Goldgroup Mining Tumbled Today
Eric Volkman, The Motley FoolFri, August 28, 2026 at 9:54 PM UTC
0
Image source: Getty Images.Key Points -
It seems as if the U.S. Fed is willing and eager to raise interest rates.
Given the increasing possibility that this will happen, investors traded out of precious metals.
10 stocks we like better than Goldgroup Mining ›
As the trading week came to a close, precious metals were looking significantly less precious. Gold, silver, and other high-value metals declined in price amid the apparently growing possibility of a rate hike by the U.S. Federal Reserve (Fed).
With that, precious metals companies' stocks were sold off, for the most part; Exhibit A: Goldgroup Mining(NYSEMKT: GORO), which fell by nearly 4% that trading session.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again.In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
A hawkish pronouncement
Speculation of a Fed interest rate raise was rife on Friday. That morning, new(ish) Fed chair Kevin Warsh gave a speech at this year's Jackson Hole Economic Symposium. As usual with the world's most closely watched central banker, his remarks were closely monitored and scrutinized.
His money quote on the day addressed the No. 1 economic fear keeping Americans up at night -- inflation. The Fed's main tool in combating this is to raise rates, with the aim of cooling price rises.
Warsh said that "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do."
That "work to do" part was interpreted by many (myself included) as meaning he would be hawkish on inflation if necessary. From what I see, inflation isn't set to decline meaningfully, so rate increases could very well be on the horizon. If that occurs, precious metals would be less attractive next to yield-bearing assets such as bonds.
Not at the bottom yet
So basically, the gold and silver markets are pricing in the increasing possibility of that happening. And where prices go, so go the stock prices of companies either directly or heavily involved in the mining and production of those metals. Hence, Goldgroup's Friday decline.
Advertisement
This isn't a favorable environment for precious metals, and I'd emphasize that they hit all-time highs in the early months of this year. I'm convinced at least one rate hike is coming, and soon, and Goldgroup and its peers will suffer from fresh drops in the prices of gold, silver, and similar commodities.
Should you buy stock in Goldgroup Mining right now?
Before you buy stock in Goldgroup Mining, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Goldgroup Mining wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $430,571!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,399,268!*
Now, it’s worth noting Stock Advisor’s total average return is 986% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of August 28, 2026.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Source: “AOL Money”
