Some called the steep sell-off in gold on Jan. 30, 2026, a "Black Friday," in a nod to major stock market crashes of the past. President Trump's nomination of Kevin Warch to be the next Federal Reserve chair caused many gold investors who had enjoyed significant gains to run for the hills.
Gold stocks plunged even more than gold prices. For example, shares of Newmont (NEM 1.49%) and Barrick Mining (B 2.09%) both fell by double-digit percentages. Should you buy these stocks on the dip?
Image source: Getty Images.
New economics for gold miners
It's important for investors to understand that the recent decline in gold prices shouldn't impact Newmont's and Barrick's profits all that much. That's because the two companies are already enormously profitable.
Newmont's gold co-product all-in sustaining costs (AISC) per ounce were $1,566 in the third quarter of 2025. The company projects AISC per ounce of $1,760 in the fourth quarter. Barrick's AISC per ounce were $1,538 in Q3, with guidance estimating AISC of between $1,460 and $1,560 per ounce in Q4.
As of Tuesday, Feb. 3, 2026, spot gold prices were hovering around $4,622 per ounce. Both Newmont and Barrick can easily achieve gross profit margins of well over 160% at that level. Historically, these gold mining companies gross profit margins rarely topped 50%.
Newmont and Barrick are also adding capacity at an opportune time. In October 2025, Newmont announced the commencement of commercial production at its Ahafo North mines in Ghana. The company expects Ahafo North to produce between 275,000 and 325,000 ounces of gold annually over 13 years. Meanwhile, Barrick believes that its Fourmile site is "one of this century's most significant gold discoveries" and could produce up to 750,000 ounces of gold per year.
NYSE: NEM
Key Data Points
Key growth drivers for Newmont and Barrick
Warsh serving as chair of the Federal Reserve could help preserve the board's independence, as investors hope. However, it likely won't put a dent in two key growth drivers for Newmont and Barrick.
The ongoing global demand for gold is the obvious growth driver for these companies. One key reason for this demand is that central banks outside the U.S. have aggressively increased their gold reserves. These moves stemmed in part from international concerns about the stability of the U.S. dollar. Warsh's appointment probably won't alleviate those concerns significantly.
Another important growth driver for Newmont and Barrick, though, is copper demand. Copper is ideal for use in data centers because of its conductivity and resistance to corrosion. The rapid expansion of artificial intelligence (AI) infrastructure is causing the demand for copper to increase. One study estimates that data centers could require between 330,000 and 420,000 tonnes of copper per year by 2030.
Newmont produced 35,000 tonnes of copper in Q3. Barrick produced 55,000 tonnes of copper, thanks largely to a dramatic increase in production at the company's Lumwana mines in Zambia. Are Newmont and Barrick practically back-door artificial intelligence (AI stocks)? I wouldn't go that far, but both should definitely benefit from AI-fueled copper demand.
NYSE: B
Key Data Points
The rebound is already starting
Some savvy investors may already believe that the recent sell-off in Newmont and Barrick was overdone. Both gold mining stocks are rebounding. Others might see these moves as more of a "dead cat bounce." I side with the former camp rather than the latter.
Sure, gold prices could remain highly volatile. However, the fundamental factors behind the increasing demand for gold don't seem likely to go away anytime soon. I don't think the AI data center boom is about to collapse, either. Newmont and Barrick should continue to generate exceptional profits in this environment.
Not everyone would view Newmont and Barrick as value stocks, but neither stock is priced exorbitantly. Newmont's forward price-to-earnings ratio is 15.7, while Barrick's shares trade at roughly 12.5 times forward earnings.
Plunges like the one last week can be unsettling. But they also create great buying opportunities for investors who take the time to fully understand the market dynamics.
