What happened

Stock markets are rallying today, but gold and silver stocks are going in the opposite direction. Miners Coeur Mining (NYSE:CDE), Gold Fields (NYSE:GFI), and Harmony Gold Mining (NYSE:HMY) each closed down 13% today. And Agnico Eagle Mines (NYSE:AEM), AngloGold Ashanti (NYSE:AU), Eldorado Gold (NYSE:EGO), and Endeavour Silver (NYSE:EXK) all dropped by between 8% and 10%.

Experienced investors in precious metals know that they, and the miners, often move in a different direction than equities, so today shouldn't come as a huge surprise. But why is good news on a coronavirus vaccine bad for anyone? 

So what

The answer, of course, isn't that it is bad news. But gold and silver both touched two-month highs last week, and even with drops of 4.5% and 5.5% respectively today, the metals have been rising through the months of the pandemic. 

gold bars with red down arrow indicating price drop

Image source: Getty Images.

Gold is up more than 27% in the last 12 months, and silver is up 42% in that time. And the miners are reaping the benefits from the jump in metals prices. Last week, Endeavour Silver reported its third-quarter results saying revenue, cash flow, and earnings were all significantly higher compared both to the previous quarter and the year-ago period. Its cash position, for example, was 47% higher than even its second-quarter 2020 level. 

Now what

Of course, the news that a Pfizer and BioNTech coronavirus vaccine showed a surprisingly high 90% effectiveness from a phase 3 trial interim efficacy study wasn't the only big news investors had to digest today. 

Over the weekend, it was reported that Democrat Joe Biden earned enough electoral votes to claim victory in the U.S. presidential election. The U.S. dollar index had been steadily dropping over the past week or so, as the election seemed to be trending toward that outcome.

With the news on the presidential election more universally accepted, and the equity markets soaring today, shares of miner and metal stocks inevitably reversed course and trended down. 

Some miners are still in the midst of reporting third-quarter earnings. Today's reversal in metals prices won't change those outcomes. Expect strong reports just as Harmony Gold reported today that "a solid operational performance, further aided by the gold price, has significantly strengthened our balance sheet."

Many investors in these miners know that precious metals are a hedge to balance out equity positions in a portfolio. Today's large drops in the backdrop of a market jump shouldn't come as a surprise, and shouldn't change an investor's strategy. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.