Why Resource Equities Fell Short as Commodities Rallied in 2025

In September 2025, gold climbed roughly 10-12%, copper added about 5.8% and silver jumped 14.5%. Over the same month, the S&P 500 Materials index fell 2.31% and Australian energy equities dropped more than 8%, which challenges the idea that rising commodity prices automatically lift resource equities.

At the time, the month was often summarised as a risk-off selloff driven by a rate hike and a strong dollar. One year on, in October 2026, the record tells a different story. The US Federal Reserve cut rates instead of raising them, and the dollar mostly softened.

The real story was dispersion: some resource shares rose while others fell, and assets across markets were repriced. For anyone holding miners or energy stocks, that version is far more useful than the simple one.

Here is the framework for understanding why commodity strength does not pass evenly into share prices. It also covers how disciplined investors handle seasonally weak, macro-driven stretches.

Was September 2025 really a resource selloff? The data says dispersion

The popular account came from the Olive’s Compass podcast on 8 October 2025. In that episode, president and CIO Sam Plesz and executive chairman Derek McFerson described every major resource-linked equity index as declining despite commodity gains. The index data does not support that view.

Start with Australia. The S&P/ASX 300 Materials index gained between 4.6% and 6.5%, depending on the report, and gold producers led the advance. Australian energy fell between 8.6% and 10.5%, hit by the collapse of the Santos takeover and weaker oil. The broad market barely moved, slipping about 0.7-0.8%.

Gold producers led the Australian advance partly because gold and silver miners carry some of the cleanest balance sheets in the equity market, an advantage when financing costs and long-end yields stay elevated.

One country, one month, two outcomes According to William Buck, Australian materials rose about 6.5% in September 2025 while energy fell about 9.1%.

The global picture showed the same split. The S&P Global Natural Resources Index rose 1.93% for the month and 9.36% for Q3, supported by gold and copper holdings while energy dragged.

Sources do not agree on every number. For example, CME and Vontobel put gold’s gain at 10.2%, while William Buck reports 11.9%. The direction is the reliable signal, not the decimal place.

Selectivity also paid off. The VanEck Global Resources Fund returned 12.74% in Q3, compared with 9.36% for its benchmark. The main lesson is that resource equities are not one trade, so a broad basket can hide which commodity exposure is actually driving your result.

Dollar, yields and the Fed: what actually moved markets

If the selloff was really a split, the macro explanation needs correcting too. Jerome Powell spoke at Jackson Hole on 22 August, not in September, and his speech opened the door to a cut while warning about inflation. On 17 September, the Fed lowered its policy rate by 25 basis points to 4.00%-4.25%. A basis point is one hundredth of a percentage point.

The dollar did not surge either. The US Dollar Index (DXY) ended the month around 97.7-97.8, with only brief risk-off bounces to about 98.48.

The podcast hosts recalled a hike, with roughly six more priced in. The research does not support that memory. It is a useful reminder of how quickly remembered narratives drift away from the record.

Three forces were pulling against each other:

• Policy easing: short-term rates fell after the Fed cut.
• Long-end yield pressure: the US 30-year yield sat around 4.75-4.77% in late September.
• Dollar bounces: temporary flights to safety interrupted a softening trend.

The 10-year yield ended near 4.15%, about 8 basis points lower. Yet long-dated yields stayed high by historical standards, and that hurts assets valued on cash flows many years away, such as mines.

Two readings of rising long-end yields

The first reading points to fiscal and supply pressure. Lombard Odier noted that the French-German bond spread rose above 80 basis points in late August amid political gridlock in France. MSCI later described a repricing of fiscal risk, debt issuance and term premia across the US, Europe, Japan and the UK. Term premia are the extra yield investors demand for holding longer-dated bonds.

The second reading is growth resilience. Under this view, sturdier nominal growth means slower rate cuts and possibly a firmer currency.

Each reading causes problems for resource investors in a different way. That tells you the headline policy rate matters less to miners than the long-end discount rate and the fiscal risk premium.

The structural forces behind rising yields, including fiscal supply and shifting global capital flows, matter more to long-duration assets like mines than the headline policy rate, which is why long-end pressure persisted after the Fed cut.

Why commodity gains do not flow straight through to resource equities

The bond-market pressure exposes something structural. A mining or energy share is not a commodity price instrument. It is a claim on future earnings, discounted at prevailing rates and exposed to operating, balance-sheet and jurisdictional risk.

The September 2025 gap was not a one-off, and the reasons mining equities lag metal prices recur across cycles: costs, balance-sheet leverage and discount rates absorb much of the headline commodity gain before it reaches shareholders.

Six mechanisms explain the gap:

1. Discount rates and duration: higher long-end yields shrink the present value of future mine cash flows.
2. Risk premia: investors demanded more return from cyclical producers as sovereign risk rose.
3. Dollar and cross-asset flows: Reuters reported investors returning to US equities while cutting emerging-market, euro-zone and UK holdings.
4. Sector heterogeneity: gold and copper rose while crude fell, so energy dragged on broad benchmarks.
5. Operational and balance-sheet leverage: labour, diesel, royalties, sustaining capital and refinancing all eat into price gains.
6. Unstable correlation: markets often wait for guidance and realised prices before rewarding a miner.

Energy shows how blunt the label “energy prices” can be. Crude fell, while heating oil rose 2.8% and gasoil 3.6%, according to Vontobel. The tightness sat in refined products, not crude. The podcast’s explanation of limited Western refining capacity remains unconfirmed.

Disruption is not a universal tailwind The Grasberg force majeure lifted copper prices, but a supply shock only raises earnings for miners that are still producing at the higher price.

Positioning added a further layer. LME fund long positions rose from 55,325 to 87,152 contracts, and CME copper inventories reached 277,400 tonnes. Capital moved into futures rather than producers.

Narrow breadth and the opportunity cost of AI leadership

UBS reported that US fund managers’ gains came mainly from biotech, growth and AI stocks, while materials lagged. The Banque de France later highlighted how much US market value was concentrated in highly valued AI companies. That creates pressure on relative performance and raises the risk of crowded trades.

There is a fair counter-view. Narrow leadership may reflect genuine earnings strength rather than excess, so it is not automatically a sell signal. Upcoming elections and headline-driven trading added volatility on top. A rising commodity price is necessary but not sufficient for your holdings to rise, so check costs, balance sheets and guidance before assuming a link.

How disciplined investors handle seasonally weak, macro-driven stretches

With so many moving parts, the urge to act is understandable. September and October are historically soft months for equities. Yet seasonality alone cannot explain why Australian materials rose 6.5% while energy fell 9.1%.

Seasonal patterns in mining stocks, from the soft September-October stretch to year-end tax selling and a January rebound, are real but only part of the picture when macro forces dominate.

The managers behind the podcast relied on structure rather than prediction. Their fund held about 10% cash, split across two sleeves:

• a liquid sleeve of larger companies that can be exited within a day
• a less liquid fundamental sleeve with more upside potential

They added to positions gradually. The fund beat its reference indices, though the month was still described as unpleasant. They also noted that some Q3 production results were strong but went unrewarded amid the macro noise.

Tax-loss selling typically peaks in mid-December. It hits junior explorers, developers that are burning cash, and illiquid small caps hardest. The podcast expected limited pressure in 2025 because many investors were sitting on profits, and the fund has historically been fully invested by year-end to capture a January rally.

Commentary in the research suggests staged buying as these conditions appear:

1. Commodity prices hold their key technical levels.
2. Futures positioning becomes less crowded.
3. Company guidance confirms the benefit of higher prices.
4. Long-end yields stabilise.
5. Market breadth broadens beyond the AI leaders.

Where the approach has limits

Holding cash carries reinvestment risk. It dilutes returns if prices break out, and it can tempt you to wait for a perfect entry that never comes. Liquidity is also not the same as quality: large producers still face cost inflation, political intervention and stretched valuations.

Even so, a cash buffer and liquidity plan built in advance can turn a forced-selling window into an opportunity. Improvising in the middle of a selloff usually has the opposite effect.

What September 2025 changes, and what it does not

September 2025 was a dispersion event, not a blanket selloff. The Fed cut rates. The pressure came from long-end yields, risk premia, crowded positioning, market concentration and the different earnings structures across metals and energy.

In any similar episode, four variables are worth monitoring:

• long-end bond yields
• the direction of the dollar
• market breadth beyond the AI leaders
• company guidance compared with spot commodity prices

The lasting takeaway is simple: check how a commodity move actually transmits into company earnings before trusting the headline price.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results.