What happened
Soaring yesterday, shares of PolyMet Mining (PLM) raced higher and ended the day 40% higher than where they were at the end of Monday's trading session as the price of gold touched an unprecedented level. But with the rally in the metal failing to continue today, shares of PolyMet are looking a lot less lustrous to investors.
As of 11:03 a.m. ET on Wednesday shares of the miner are down 3.8%, recovering from their earlier slide of 15.7%.
So what
During periods of geopolitical uncertainty, it's typical for investors to rush toward gold, recognizing it as a defensive position -- a dynamic that played out yesterday. Dropping below $2,000 per ounce, the price of gold is heading south today, however, as President Volodymyr Zelenskyy articulated a willingness to negotiate with Russia.
Image source: Getty Images.
In addition, he said that he was interested in addressing security issues for both countries, saying: "These will be guarantees not only for Ukraine. These will be guarantees for Russia as well, about which it is constantly talking."
The other likely catalyst for PolyMet's slide is the simple fact that investors are taking profits today. On Tuesday, the mining stock closed at $3.99, a level that it last reached in July 2021.
Now what
As the price of gold falls today, it's not surprising that shares of PolyMet are also tumbling, considering the strong correlation between movements in the price of gold and those of gold stocks. It's important to recognize, however, that nothing fundamental has changed regarding PolyMet. So if you were bullish on the company's prospects yesterday, there's no reason for you to feel any different today.
