AEM Stock Dives as Silver and Gold Profit-Taking Turns Turbulent

Agnico Eagle Mines (NYSE: AEM) saw its shares plunge 5.7% during Monday’s trading session, caught in the crossfire of a dramatic reversal in precious metals markets. What had been a stellar rally turned into a sharp correction as traders scrambled to lock in outsized gains and margin-pressured investors faced forced selling.

The Precious Metals Peak and Reversal

Silver’s price action told the story most dramatically. After surging north of $80 per ounce overnight—marking an all-time high—the metal reversed sharply the following morning. By midday, silver had collapsed to $70.25 per ounce before stabilizing around $71.12, representing a 7.9% single-day loss. Gold followed suit with a more modest 4.5% decline to $4,349.30, underscoring that while both precious metals sold off, silver absorbed roughly twice the damage.

The 2025 rally had been spectacular for commodity investors. Silver began the year hovering near $20 per ounce, then more than tripled through last night’s peak. Gold climbed 65% over the same period. These are the kinds of gains that test investor discipline—precisely the kind that trigger profit-locking.

When Rally Becomes Rout: The Margin Dynamics

The selloff reflects more than simple profit-taking. Market analysts point to a troubling dynamic: investors who purchased silver and gold on leverage face mounting margin pressure as prices decline. Each price dip forces brokers to issue margin calls, compelling overleveraged traders to sell—even those who don’t want to. This forced liquidation creates a self-reinforcing cycle where selling begets more selling.

What began as an orderly profit-taking session risks morphing into something more severe. The flash crash dynamic—where algorithmic selling and forced liquidations compound losses—remains a real threat in volatile commodity markets. AEM, as a precious metals mining company, sits directly in the path of this turbulence.

AEM’s Valuation: Expensive on One Metric, Reasonable on Another

Yet deeper analysis suggests panic may be premature. Yes, Agnico Eagle trades at roughly 26x GAAP earnings, which looks elevated in isolation. However, the stock appears more reasonably valued at 25x free cash flow. More importantly, Wall Street analysts forecast AEM’s earnings will expand nearly 37% annually over the next five years—growth that justifies a higher multiple.

The company also returns capital to shareholders via a 1% dividend yield, providing income support during volatile periods. For long-term precious metals investors, these metrics suggest AEM should weather this storm.

The Real Question: Is This Buying Opportunity or Warning Sign?

The core question isn’t whether AEM dropped today—it plainly did. Rather, it’s whether today’s markdown represents attractive entry pricing or a warning that leverage-driven instability threatens the entire precious metals complex.

Motley Fool’s analyst team has consistently identified differentiated compounders in the market. Consider Netflix: recommended in December 2004, a $1,000 investment would have grown to $509,470 by year-end 2025. Or Nvidia in April 2005—that same $1,000 would have reached $1,167,988. The Stock Advisor service’s 991% average return dwarfs the S&P 500’s 196% return, demonstrating that identifying quality during volatility pays.

AEM didn’t make the latest “10 best stocks” list. That’s worth considering as you evaluate whether today’s selloff is noise or signal in your precious metals allocation.

For now, the fundamentals support patience with AEM, even as technicals suggest further volatility may lie ahead.