XME Rode Gold to a Near Double, Now Freeport's Q2 Restart Will Test the Rally

"The SPDR S&P Metals & Mining ETF ( NYSEARCA:XME) has nearly doubled over the past year, climbing from around $62 to $118, as investors pile into commodities exposed to electrification, defense, and monetary policy uncertainty. With top holdings like Newmont ( NYSE:NEM), Freeport-McMoRan ( NYSE:FCX), and Alcoa ( NYSE:AA) combining for roughly 16% of the portfolio, XME functions as a leveraged bet on metals prices and global manufacturing health."

"Gold's rally to between $4,900 and $5,000 per ounce has fundamentally transformed Newmont's profitability profile. The surge enabled the company to generate $1.6 billion in free cash flow, demonstrating how commodity price momentum directly converts to miner cash generation. This performance exceeded earlier market expectations, as traders had priced gold closer to $3,200 for much of the prior year. Copper presents a different risk profile for the ETF's holdings."

"Freeport-McMoRan faces pressure if prices retreat toward $6.00 to $6.40 per pound, though the company's planned Grasberg mine restart in Q2 2026 could offset pricing headwinds through volume growth. The Producer Price Index for commodities has held near 260 for the past year, signaling stable input costs that support current metals valuations. This stability provides a foundation for sustained metals prices, though any significant move in either direction would signal changing demand dynamics."

The SPDR S&P Metals & Mining ETF (XME) rose from about $62 to $118 over the past year as investors chased metals tied to electrification, defense, and monetary uncertainty. Major holdings such as Newmont, Freeport-McMoRan, and Alcoa account for concentrated exposure and make returns sensitive to commodity prices and production. Gold's rally to roughly $4,900–$5,000 per ounce drove about $1.6 billion in free cash flow at Newmont. Copper price weakness toward $6.00–$6.40 per pound would pressure miners, though a Grasberg restart in Q2 2026 could add meaningful volume. The Producer Price Index near 260 points to stable input costs, but near-term returns depend on where commodity prices settle and whether production growth meets elevated expectations.

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