John Rubino, [Substack https://rubino.substack.com/ ], joins us for another wide-ranging and nuanced discussion around fundamental drivers, macro catalysts, and technical momentum factors that are leading to volatility in precious metals like silver, gold, and platinum, and the related PM stocks. We also review initiatives from industry and governments around the world to secure domestic supplies of critical minerals like copper, nickel, zinc, uranium, and rare earths.
We start off reviewing the run in silver, gold, and platinum to new all-time highs just in January, followed by a sharp reversal lower the last day of the month and over the handful of trading sessions to kick off February.
- John touches upon the series of potential catalysts that led to the swift correction in metals process from investors “with large profits that needed to be protected,” the Trump appointment of Kevin Warsh to the Fed, both US and Chinese commodities exchanges raising margin requirements to trade the metals, and corrective trends pressuring a number of equity market sectors and the crypto space lower in sympathy.
- He contrasts those headwinds with the longer-term positive tailwind catalysts for the precious metals; arising from central bank buying of gold, geopolitical uncertainties, concerns about the growing national debt, and the desire to cut interest rates and run the economy hot to try and grow the US out of the economic challenges it faces, which will end up being even more inflationary.
John reviews the investing strategies he is utilizing in his own portfolio of resource stocks; where he is dollar cost averaging into quality producers and developers across a range of key metals stocks using low-ball bids to accumulate positions on pricing pullbacks.
When discussing the growing demand for critical minerals globally for defense and industry, John highlights the recent US initiative to build a strategic minerals stockpile dubbed “Project Vault.” The discussion is also taking place about the government setting pricing floors in many critical minerals to encourage development of domestic mineral deposits or with trading partners, getting around the artificially low prices set by China. We also discuss the large capex spends from tech and AI companies and how commodity intensive that physical buildout will be in combination with the energy needs.
We discuss merger & acquisitions from precious metals companies into copper and critical minerals deposits may be the right kind of diversification taking advantage of the larger macro themes in the commodities sector. John stresses the importance of investors continuing to get educated on the specific uses and demand factors in some of the more niche’ critical minerals and energy metals, to better understand the individual companies they are investing in.
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