Why Coeur Mining Stock Crashed on Wednesday
Key Points
Coeur Mining is all set to acquire New Gold in a deal that will more than double its free cash flow.
The Federal Reserve's latest move, however, is sending gold and silver prices tumbling.
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Shares of Coeur Mining (NYSE: CDE) crumbled on Wednesday, falling more than 8% by 3 p.m. ET. Coeur derives nearly 70% of its revenue from gold and 20% from silver, making it highly susceptible to the prices of both precious metals.
Both gold and silver are in a downtrend, and March 18 provided investors with an even stronger reason to sell Coeur shares.
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Why is Coeur stock falling?
Prices of gold and silver fell over 3% each on Wednesday ahead of the Federal Reserve's meeting. Oil prices, meanwhile, jumped as the conflicts in Iran and the Middle East escalated further.
As widely feared, the Federal Reserve has kept interest rates steady amid stubborn inflation, a surge in oil prices, and increased economic and geopolitical uncertainty.
Elevated interest rates make non-yielding assets like gold and silver less attractive to institutional investors, which is why these precious metals shed their safe-haven appeal and fell sharply on Wednesday, despite an ongoing war.
Since Coeur's revenue and cash flows are directly tied to precious metal prices, its stock tumbled on Wednesday and fell to its lowest level through the day after the Federal Reserve's announcement in the afternoon.
What should you do with Coeur stock now?
Watching your stocks bleed red is never easy, especially when geopolitical instability sends precious metals into a tailspin. It's hard to stay level-headed when the market feels like a guessing game.
However, if you can look past the immediate volatility, Coeur Mining is about to make one of its biggest growth moves ever by acquiring New Gold (NYSEMKT: NGD). The deal is expected to more than double Coeur's 2026 free cash flow to $2 billion while lowering costs and boosting margins.
Coeur's revenue nearly doubled to $2.1 billion in 2025 on the back of record gold and silver production and surging prices. The New Gold acquisition should solidify Coeur's growth trend in the long term.
Should you buy stock in Coeur Mining right now?
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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