Gold Eyes Worst Month Against Oil Since 1973; Mining Stocks Slump Most Since 2008

A movement unseen since the Arab oil embargo is reshaping commodity markets — and the longer the Iran war and the Hormuz blockade hold, the deeper the damage runs. Gold prices are facing their worst monthly performance against Brent crude since December 1973 — and the shockwave is tearing through the mining sector with historic force. Gold-Oil Ratio Crashes 43% — Worst Monthly Drop Since 1973 Gold, tracked by the SPDR Gold Shares (NYSE:GLD), is down 13% month-to-date, falling to $4,580 per ounce as of Thursday morning — its worst absolute monthly drop since October 2008, when Lehman Brothers had just collapsed and global markets were in freefall. But the absolute decline in gold is almost a distraction from what is happening in relative terms compared to oil prices. The gold-to-Brent ratio — the number of barrels of crude an ounce of gold can buy — has crashed 43% month-to-date to roughly 40. That is gold’s worst monthly performance against oil since December 1973, when Arab states cut off crude exports to the West and rewired the entire global commodity order. Why Gold Is Falling During The War In Iran The conventional market wisdom holds that gold rises in times of geopolitical stress. Safe-haven demand, the argument goes, pushes bullion higher when uncertainty spikes. The Iran war has turned that playbook on its head. Gold is not a simple safe-haven asset that rises in any conflict. Gold is an interest-rate-sensitive asset, and right now, interest rates are the problem. Rising oil prices, driven by the Strait of Hormuz disruption and the broader energy shock, are reigniting inflationary fears that markets had spent months assuming were behind them. Before the conflict, traders had priced in two Federal Reserve interest rate cuts in 2026. That expectation has now evaporated. In its place, a more alarming scenario is gaining traction: if the energy shock persists, the risk of outright rate hikes re-enters the picture. According to Polymarket, there is a 17% chance of a Fed rate hike this year – that’s more than double the odds seen prior to the start of the war in Iran. This is the mirror image of the 2025 historic gold rally. Then, falling inflation and aggressive rate-cut expectations propelled gold to record territory. Now, the same mechanism is working in reverse. A Historic Unwind For Gold Miners The VanEck Gold Miners ETF — as tracked by the VanEck Gold Miners ETF (NYSE:GDX) — has shed 29% of its value in 19 days, from a monthly high of $117 to $82 as of Thursday. The gold mining sector is now on track for the worst monthly collapse since the aftermath of the Lehman Brothers bankruptcy in October 2008. It would have seemed unthinkable just weeks ago, as miners were Wall Street’s hottest sector. The GDX ETF had surged nearly 200% between February 2025 and the close of February 2026, carried by the most powerful gold rally in nearly five decades. Gold itself returned 64.6% in 2025 — its best annual performance since 1979. By late January 2026, spot gold had reached an all-time high of $5,589 per ounce. The rally seemed unstoppable. Then the Iran war began and it crashed the entire bullish metal narrative. The Double Squeeze On Mining Margins Gold mining companies earn profits from the difference between the gold price they sell it for and the cost of extracting it from the ground. When gold prices fall and energy costs surge simultaneously, that margin is attacked from both directions. Since the war in Iran began, wholesale diesel prices — the primary fuel for heavy mining equipment — have risen 61%. Energy typically accounts for 15%–20% of total cash costs at major gold mining operations. A 61% surge in diesel does not compress margins linearly — it can eliminate them entirely at higher-cost mines. The gold-to-oil ratio — a widely used proxy for mining sector profitability — illustrates the damage in stark terms. The last time the commodity market saw a dislocation of this magnitude was in the immediate aftermath of the Arab oil embargo — when a sudden, politically-imposed energy shock triggered a simultaneous surge in crude prices and a repricing of inflation expectations that proved devastating for non-yielding assets and energy-intensive industries alike. History, it seems, has an uncomfortable habit of rhyming. Photo: Shutterstock