Gold & Silver "Generational Opportunity" in Sharp Pullback?

0:00We're watching Gold Silver Copper Futures all um they've to the downside but you know what's happening next You saw gold go above 5600 and folks have been looking to precious metals overall as a safe haven or a place that could see growth We're joined by David Strzyski CEO of Sound Planning Group and Ben McMillan CIO of IDX Digital Assets And I'm glad you're both here David. I know you've come on You were actually looking even more so it's silver I think last time then gold you had looked at gold a lot in the past But that had run up and then you sort of were switching to silver But that was I don't know how long ago that was where do you stand now and why? You know this is an opportunity right now in the metals market when you see prices come down like a thousand dollars Like you just mentioned and gold Silver's about $50 below. It's all time high This is a massive opportunity. I'm a long-term buyer And I also care about math and so if we just don't even understand where the gold to silver ratio is

1:01How many ounces of silver does it cost for one ounce of gold? We're looking at a little better than 60 ounces of silver for one ounce of gold Well in 2025 the production rate the actual supply and demand was seven and a half ounces of silver yielded for every one ounce of gold So how in the world are we sitting at a price ratio of 60 to one and so the math is the math This is a thesis that is early right now and coming out And so I believe that silver very specifically is the most undervalued asset in the entire world And as the nations continue to spend and continue to buy gold I just think that this is going to be a catalyst to see much higher highs than what we've seen so far All right look I mean to your point we saw Gold down about 10 percent this week silver's down about 15 14 15 percent Then what say you was there opportunity here in this group? Yeah, absolutely. I mean I would frankly underscore everything David just said this is You know we're looking at this is almost a generational

2:02By the dip opportunity for our clients. We're telling them across the board take advantage of this There's a couple of things I would add to you wouldn't look at silver in particular You know, there's a huge industrial use case which I think is you know part of what was getting priced in really in the last A couple of quarters and that parabolic moving silver a lot of that was demand driven looking at this AI build out What's interesting is silver is kind of become an AI adjacent trade when you look at all the demand for these data centers You know, silver's a superconductor and you know You're even seeing deals like some samsung is striking deals with silver mines directly to make sure they get the physical throughput So again, this is this is definitely a body of opportunity You know the big question of course gold is it's supposed to have this geopolitical risk premium. Why isn't that showing The short answer is you know war in Iran is You know impacting 20% of the oil flowing through the straight-of-form moves That's increasing inflation expectations. That's increasing interest rates And so you're seeing you know an asset class that already had a phenomenal run. There was some profit taking

3:02There was a lot of leverage embedded You know now you're seeing inflation expectations kind of pull that back a little bit But all of that is transitory when you look at the structural as David said the structural long-term Pieces for both of these metals is very much intact And what you think about the industrial revolution and the metals that we need to build But how much do you put you you know, we think about generations and maybe investing in this for the long-term David How much allocation are you putting into what you said silver is a great investment now are you putting a big amount in there? I personally do and I think that it's important to recognize that when we have the AI tech trade that's run so hard Done so well that this is a great time to evaluate where the PE multiples out right now relative to Gold and silver miners If we look at the trend of what's actually happened? So I'm a guy that follows macros. I look at the math We have a structural loss of about 200 million ounces on an annualized basis And we're running out of silver very specifically if you want to electrify

4:04The future you've got to have these metal miners working and so The most important thing to understand here is that the price of input of what does it cost to produce these these metals Has not gone up that much maybe diesels a little bit more expensive caterpillar machines are a little bit more expensive But the value of those of these assets have gone up so much more So I think it's important to take a very serious look at this And I think that 60 40 portfolios have not really done a great job of allocating into this specific industry because they've not understood it They've been more tech heavy etc And so I personally believe that you know these specific sectors In metals and metal miners are going to probably be the leaders in our economy for the next three five and even ten years Into the future as the 21st century is absolutely here AI I'll pay whatever price that it takes data centers will pay whatever price that it takes To continue to go forward and so I'm personally very bullish. This is the most bullish category for me because the math backs it up All right, and then Ben you were also saying here I mean the stagflation story if we run into that if the feds behind the curve when it comes to inflation that people will run

5:09To gold that was something you noted, but I'll say that you have the structural case You talked about central banks interest the record debt that we have here in the US, but also that the big banks Have up arrows for their targets, right? Yeah, I mean, I always go back to you know look at covid you know during during the covid regime United States printed roughly 80% of all US dollars in existence and when you see a step up in the in the monetary base like that You know the central banks voted with their dollars They were selling treasuries and they roughly doubled their purchases of gold after covid and that's continued They haven't really slowed down and again that's that's part of this kind of beginning of the end of dollar hegemony There's a lot of confluence of factors surrounding that China in particular is talking about starting to Denominate oil and something other than US dollar moving to potentially a goldback currency You know, we're still sitting on not only just record debt, but record record deficits war doesn't help that you're respective of where you fall on the spectrum there And so this you know again that when you look at the kind of you know what david said the math is the math That's exactly what we've been telling clients is there's no way out of this there is no no way to solve for this other than

6:14You know meaningfully hired gold prices and silver prices in the future I mean we are sort of ending near session lows here Is there opportunity quickly David Strusevsky in the entire market your final summation Yeah, absolutely. I think that gold's going to ten thousand dollars very quickly I think that you'll see that gold to silver ratio quickly go down to 50 to one 40 to one 30 to one Remember it's seven and a half to one by real production But if it goes to 30 to one you're looking at better than three hundred dollar silver right now and again AI will pay whatever the infrastructure price is lucky Barton pays whatever the price is that gonna make missiles And so the math is the math This is an opportunity right now and I think it's a gift for your viewers to actually even understands a great segment like this Ben you were talking about the D dollarization Accelerating you do deal in digital assets you're looking at gold and and silver and all that your final quick thought where the opportunity is Yeah, I mean I would underscore everything David said and I would emphasize the miners

7:14That's that's a part of this ecosystem that is largely kind of you know Under the radar for a lot of investors, especially a lot of the 60 40 investors And you know, we would really emphasize looking at not just precious metals and not just silver in gold and silver But also the gold and silver miners because you know, they're the ones who are that's worth the rubber meets the road There's a premium on physical that is not going away anytime soon The one thing that we haven't talked about is there's a lot of paper contracts that aren't backed by physical And you started to see some you know kind of weird behavior on the different exchanges with you know A lot of this kind of what looks like to be manipulative price action to help Shortsellers, you know covers, but they don't have to deliver the physical so when you buy into the miners You're inherently buying into the physical. So again, this is what we think this is a generational buying up All right, thank you both Ben McMillan and David Shzefsky. Thank you for being with us