Weekend Show – Brien Lundin & Dan Steffens – Metal Sell-Offs to Energy Supply Shocks: Gold, Silver, Oil and Nat Gas

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Now the Corwin Economics Report.

Hey everyone.

Welcome to the K-E-R-O-Port Weekend Show Corion Shad here your host for this Weekend

Edition.

This Weekend Show, first half of the show we're going to focus on this continued correction

in the precious metals and discuss what's going on in the underlying gold and silver stocks

where the juniors continue to get hit pretty hard in the majors, yeah they're down, but

at least they're weathering this pullback a bit better, back half of the show.

Over to the energy sector, it's dominating headlines and out of anything, those stocks

at least seem to be going up, well the rest of the markets are choppy at best and most

are generally trending lower.

We're kicking off this show with Brian London, Brian is the editor of the Gold Newsletter,

also our host down at the New Orleans Investment Conference this year happening just before

Halloween.

We'll post a link in the show notes for you to learn more about the Gold Newsletter and

the New Orleans Investment Conference.

Brian let's just start, big picture, Gold Silver, it's a correction month, March has been

a very tough month.

It was choppy before this, but look, the fact of the matter is now Gold Silver, silver especially

is kind of an ugly chart.

Gold I guess the long term chart still looks good, but I think we have some pretty significant

short term damage on the shorter term charts, we're not getting into the stocks yet.

So first and foremost, Brian, you're taking away from a precious metals correction in

the face of a war in the Middle East, please.

Yeah, it's amazing the volatility that we've seen in volatility is absolutely blown out,

which typically during this two year old bull market has meant that gold price was soaring,

but now we're getting one of those episodes where volatility is blown out to the downside,

everything is selling off and I just checked the rolling 20-day correlation between Gold

and S&P 500 and it has never gotten below zero this year and over the course of this correction

in March, it is soared close to one.

So everything is getting sold off, stocks, bonds, precious metals, but the metals and miners

have been hurt the worse.

That makes sense really because it's a much smaller market and it has also posted the greatest

gains.

So to whatever extent that speculators and traders in the West in particular have been involved

in this relatively tiny sector, they had tremendous gains and when things went south, that's

what they sold.

And things went south not because of geopolitical crisis because that's no reason to buy gold,

but because the oil price spike and those inflationary repercussions have undoubtedly led

the Fed to stay their hand and not even consider rate cuts any time in the future and in the

near future.

And that's all the market really cares about is what is Fed policy going forward.

That is what traders are obsessed with.

So on the margins in the futures markets to whatever degree they're involved in metals

and miners to whatever degree they're involved, that's what they're selling the most of

because that's where they have the gains because of the implications on Fed policy.

Well Brian, we were talking off Mike about some of the other ideas people are throwing

out as reasons for the sell off and people were pointing to the US dollar strength, but

we were making the point that you could look at the exact same US dollar index price and

see a range of different prices and it wasn't that dramatic of a move, but interest rates

have been going up and those are kind of anticipating Fed policy to the point you were just

making.

And it's also a global market.

It's not just the US, but lots of central banks are now talking about hiking rates to

fight inflation rising versus cutting.

Do you think that's really the story here is that central banks around the world are now

going to be less dovish and we may see interest rates pressure the gold price just because

gold doesn't pay any interest.

Yeah.

That's exactly it.

And I don't know to what extent other central banks will be able to do it, but I know the

US, we really can't raise rates much at all because of the tremendous debt load that we

have in debt service costs.

It really is a debt spiral that the US has embroiled in right now.

You're absolutely right though.

We were looking forward to Trump's man and the Fed chairmen seat and we knew that that

man, that person, whoever was going to be, and then when we found out it was a wash,

we knew that he would be leaning toward rate cuts at the first and every opportunity.

That's not going to happen, maybe even for the rest of this year, maybe only one cut

this year.

So that's been a big turnaround in the markets and the markets don't like that.

They live for the flow of Fed liquidity.

That's what keeps them elevated and keeps them betting.

And that looks like it's been withdrawn.

I do believe that once we get past this crisis and the pig and the python, as it were,

as far as the inflationary repercussions of this oil price spike, then we'll get back

to that environment and that sentiment that we're going to have a bias toward rate cuts

going forward.

The bottom line is that I think gold, I think the metals, the precious metals and the minors

are at a tremendous buying opportunity right now.

Over the last few days as we speak, we've had gold trying to take off and in some cases

doing it overseas and getting some of those games shaved and New York trading.

But whenever there is a relief rally across the markets, stocks bonds, everything, then

we're going to see gold and the rest of the metals and the rest of the miners pop right

back up.

Brian, I'm curious what you think about, I guess, the loss of interest in the sector.

Because last year, I was pointing out there are all kinds of stats on how much demand

was coming into ETFs, whether it was asset backed or even gold stock ETFs.

It seemed like everybody was talking about gold because it was performing so well and

now it's a totally different story this year.

I haven't taken a look at the COT reports recently and I haven't read any reports on

ETF demand.

I assume it's really just fallen off the table.

What are you seeing out there in terms of, I guess, the generalist just exiting this

space?

Yeah, I don't know to what extent they have been.

If you look at the open interest for the comics, though, it's at multi-year lows right

now.

That's why I don't think a lot of this selling in this episode has come from Western speculators.

We have seen the ETFs, the global total for ETFs across the world, not just GLD, has fallen

off precipitously, basically following the price.

Holdings in the global ETFs have fallen.

I think a lot of the selling in this episode actually came from Asia.

We've seen a good bit of trading from Asia, speculation from trading, which is counter

to all of the historic trends that we've ever seen.

It's usually been Western investors who follow the price up and speculate and it has always

been Asian investors who buy in the dips.

That's completely flipped, 180 degrees, and we've seen a lot of speculation on the Asian

exchanges.

Now, Asian exchanges are different in that there's really fiscal settlement, but before the

actual settlement, you can speculate as much as you could on the comics.

So it's been an awful lot of speculation in Asia.

I think that's been behind a lot of what we've seen so far.

Brian, let's pivot over into the equities and the roller coaster ride that they've been

on.

I think 2026 is only, we're only three months into this year, we're still in the first

quarter, which has been a record quarter as far as the metals price averages.

That's the record average price of gold, record average price of silver, record average

price of copper.

So you're seeing really good metals prices if you smooth out some of the noise, but if

you think about the roller coaster ride we've been on this year, January was a scorching

ride higher only to end on the very last day with a swan dive down.

Things corrected in early February, bounced back, and I think a lot of people forget that

in February, GDX, GDXJ, and a lot of the stocks actually made a newer high, a higher

high than in January, only to get reversed right at PDAQ.

The PDAQ curse came into play and all of March, we have been in a down draft and it sucked

all the air out of the room.

What are you looking at as far as this volatility in the stocks and can you believe how fastly

things have deteriorated just in one month?

Yeah, we really have rarely, if ever, seen this kind of volatility.

We've had volatility on the upside, we've had volatility on the downside, but it's amazing

to see the way the gold surged out of the gate in the new year.

In late January, we had that stomach churning fall, then as you mentioned, February, we got

it all back and more and then we had the big drop in March again.

Really, it has you kind of looking forward to April, it's ever going to keep doing this.

But I do believe that what we saw in February was the fact that the underlying trend, the

factors that are really driving the market, driven this whole bull market are still firmly

in place and all we have to do really is get past this Iran conflict and the spiking

oil prices and the influence that has on Fed policy.

Once we get beyond that and we know that there is an end game in play as we speak, once

we get beyond that, I think things normalize and this bull market regains upward momentum.

In the meantime, we're seeing a lot of great companies going on sale at 25-30% below

their recent levels or more.

Yeah, or more.

That's what I was going to say.

There are a lot of stocks that are down 50-60%.

Those are mostly the juniors, even juniors that have quality resources it looks like.

So Brian, where is the best opportunity then?

Is it in these juniors that have sold off even more or is it in these majors which clearly

are a bit more of a safe play, at least at these prices because they're at least still

making money.

They're taking advantage of still a broadly higher gold price.

Where is the better opportunity in your eyes?

Well, I don't know if I would say better.

I will say that the majors offer the kind of potential that we used to expect from the

juniors at this point.

I do think you're correct there are the safer play.

They offer tremendous opportunity better upside than I think over the near term than

I think I've seen ever in my career in this industry.

So I really do like the potential they offer.

That said, I really focus on the juniors and I see a lot of great stories there.

The juniors are cashed up across the board.

The drilling that we're going to be seeing this year is going to be amazing in terms of

meterage and results.

There are targets that have been defined, there are targets that have been expanded.

I like the juniors across the board.

I like the companies of the big resources, but I really like the exploration place here

because there are some fantastic targets and companies that we found that are now being

drilled because the companies have the money to do so.

Well, Brian, it's a curious fate that the mining sector has in that for years they couldn't

raise money.

They didn't have big work programs.

They were trying to survive and any of the capital raises they did were just to keep

the lights on.

Then the sector finally caches up.

We get a good bull market going and now if you look at a lot of news releases when they

come out, if it's good news, it may get one day in the sun and then it still gets sucked

down in the selling pressure or a lot of companies are now selling off even on good news.

So whether that's a drill result or a resource update or an economic study, we've seen a lot

of companies put out what is really great news for the company.

They've worked six months to a year on it and they still sell off.

Are we back to that kind of mode where drill results will get noticed or do they only

get a day or two in the sun?

What's your outlook for how people were received the news?

Well, I think that phenomenon that you're talking about is purely related to the setback.

I have seen good news get rewarded, you know, when the market environment, the underlying

environment is positive, sentiment is positive, sentiment turned dramatically negative.

I mean, if you look at the gold miners bullish index, bullish percentage index, it

reached a multi-year low.

The previous time it had approached these recent lows, which was like, I think, a 3% on

that index.

The only time it had approached that low was in February of 2024, which was the beginning

of this bull market.

In fact, because of that low and that index in February of 2024, I predicted and called

for an imminent rally in gold based on that one index.

And we're washed out at those levels again.

Every time we've gotten to those levels on the miners, that degree of bearishness on

the miners, we've had a big snapback in the gold price and the miners themselves.

I think this setup right now is a direct analog to what we saw two years ago.

Now that makes total sense.

Chad's even pointed that out though that bullish miners percentage index dropping to single

digits.

Yeah, I can go a little bit lower.

Yeah, I can stay low for a little bit, but usually is some sort of a bottom.

But to me, that doesn't speak of a bull market though.

When stocks get that oversold, especially when it happens that quickly, makes me worry

that we might just be trading these stocks rather than them being long-term holds like they

were for the last few years as gold was breaking out and just consistently hitting all

time highs.

Is that something I should be worried about here, Brian, is that it shifted so much that

this isn't a bull market anymore?

Well, if you look at the technical definitions of a bull market, then we've lost the bull

market.

But gold has a habit of having long-term bull markets with big sell-offs intermingled

throughout that would technically have negated the bull market trend.

In some cases, really significantly, like the 1970s, I divide the 1970s into two bull markets.

Most people look at it as one major bull market.

So it really depends on your perspective and narrative and sentiment follows price.

Naturally, after what we've seen, we're going to see the narrative shift, the sentiment

shift, and the sentiment and the really levered assets like the miners will shift the most.

Just as they outperform in either direction, up or down, they also outperform in terms

of sentiment.

So when we've seen crashes like we've just had, sentiment is also going to get destroyed.

And we really don't have any idea of what that measures, rather that short-term or long-term

sentiment.

If I would have been in that 97% negative on the miners a week ago, as far as the short-term

direction, at the same time, I was buying in the market because I'm arranging bull on

what I think they're going over the long-term and look at this as precisely the kind of

opportunity that the market periodically hands us, where if you earn a bull market, you buy

the dips.

And this is certainly a dip.

Great point, Brian, and if people like these stocks in January and February, they should

love them now because they got a lot better entry point to accumulate.

Well, let's talk about some of the companies with news on tap that you're excited about

because to your point earlier, they're cashed up, they're doing work programs, it's nice

to see the industry back to work.

Which companies are you most excited about some of the drill results coming out in the

near term?

Well, if I look down our portfolio and gold newsletter, there are a couple that kind of stick out.

The autumn metals put out really the best drill results yet on their SEALA Creek project

in Suriname a couple of days ago.

And that drill result came a kilometer away on a new zone from where they've been working.

So it really validates the reason why I recommended that company and why I owned that company.

And it's actually one of the few stocks in our portfolio that's down a bit from our entry

price.

And I think is great by its on SEAL right now.

Another company that is a real smart money play in terms of exploration plays is K2 Gold.

It is one of the highest in priorities for the discovery group.

And not only have the principles of the discovery group, but a lot of smart money have put big

money into K2 Gold at market or above market with no warrant coverage because K2 is about

to drill the Mojave project in California that it has waited four years for permits.

So that drilling is finally going to happen next month and everybody is excited because

of the historical results.

It's been one of my favorite projects for the last half decade and it's finally going

to get drilled.

And in the meantime, they're about to get results from their SI2 project in Nevada, which

is an analog to the Silicon discovery.

So they've got great news coming up.

It is not a cheap stock, but sometimes you've got to pay up for a company that's on the

verge of what could be a big discovery.

So those are a couple of the ones that I really like right now.

A2 Gold is doing a 30,000 meter drill program in Nevada to expand a 1.4 million ounce project

and have just added some new land to their holding.

So that's another one that I think is positioned very well.

Okay, Brian, I'm curious about Silver Stocks because those went on a huge run, anything

with Silver in its name did really well kind of at the end of last year and the first

little bit of this year, but Silver is so far away from its all-time highs, that spike

high.

I realize that the current price around $70 is still a very good Silver price, but a lot

of that momentum has been lost and that chart's pretty ugly.

Do you like any Silver Stocks right here or are you a bit more in a weight and seam

mode?

No, I think Silver Stocks were getting a second bite at the Apple for them.

You know, aftermath just released some extraordinary drill results, now they're infill results, but

I think they highlight the nature of the high grade nature of Barron Gala as a project,

but they also have outlined targets that they have not tested yet because of logistical

reasons that are now going to become a priority and I think we're going to see some exploration

news from them over the months ahead.

I like aftermath at these levels.

No, interestingly, I, Silver and Gold, Gold and Silver rather, has been one of our bigger

winners in our portfolio, but it's got a tremendous market cap.

It is one of the largest, if not the largest, pure silver plays in the world and it's growing

rapidly.

We had a detailed update with that company at PDAC recently and they made a compelling

story to me why that could go up for X from where it is today.

I don't think that's a company at these levels even that we're likely to get heard on by

Lump by owning it over the next couple of years and I think it could be extremely rewarding.

Yeah, and I is one of the only pure silver producers that I'm aware of that has all silver,

not just a lot of base metal, so they're kind of an interesting seat, but Barron, even

these companies you're talking about, I'm a fan of them and aftermath same thing, but

a lot of these things have been chopped in half, so I guess it's that same thing where

people like the fundamentals, but they may look at the chart and cringe, how are you coaching

people through things at Gold Newsletter?

What kind of questions are you getting from retail investors?

I'm getting a lot of panic emailed from investors that are losing big chunks of their

investment.

How do you coach people through this time period where good companies, good fundamentals,

but a lot of these stocks have been chopped in half?

Yeah, maybe it's a sign of the quality of our subscribers, but I really haven't gotten

any panic emails from our readers.

I've gotten some people saying that they really appreciate and are comforted by my longer

term views in this kind of volatility, so I'm sure I'm right for a number of reasons,

but I sincerely believe this is one of those tremendous buying opportunities.

Again, because the fundamental drivers are still in place, we still have tremendous

debt loans, we have the unsustainable debt service payments that preclude having interest

rates at any levels above, significantly above inflation for any period of time, so that

isn't going anywhere, that isn't not going to be solved, that necessitates much greater

depreciation, much more rapid depreciation of the dollar and other currencies, and in

that kind of environment, we are going to have much higher gold and silver prices.

Now we're going to have more volatility because the Western investors have finally gotten

on board.

They started really jumping into the sector toward the end of last summer, and be careful

what you ask for.

They bring enough money for these towering rallies, like we saw at the beginning of the

year, and they're very fickle.

The money ebbs and flows like the tides, and when it flows out, it creates opportunities

like we're seeing today.

Well, Brian, I'm sure a lot of people listening are hoping that simply this is a good opportunity,

really begs the question, though, how quickly or when even could these metals get back

to all time highs and the interest really come back into the sector just like we saw

it last year.

Who knows?

But a lot for us to consider, and a lot for us to talk about so far this year, not just

in precious metals in a lot of other markets.

Brian is great at having you on the show, thanks for taking some time with us, as you

do almost every few weeks, and everyone, stick around, we're going to be right back,

putting our focus into the energy sector.