Market Cap, Allocation Gaps, and Capital Flows

Dave Erfle, Founder and Editor of Junior Miner Junky, joins me to review the hurricane of fundamentals factors that are fueling gold, silver, platinum, and copper to new all-time highs to here in the first few trading sessions of 2026.   We also dive into how this affecting the PM mining stocks. 

We start off reviewing the very strong close to 2025 with many metals closing up the year at the all-time closes on the monthly, quarterly, and annual charts, and how that moved pricing into this year in a strong technical posture.

• Dave notes that many of the macroeconomic and geopolitical factors that have developed over the last few months, did so after silver had already broken out of a 45-year cup and handle consolidation pattern.

Dave points out that we thought we had a “perfect storm” of factors in place last year with the central bank buying, runaway fiscal debt, Fed rate cuts, and dollar weakness throughout the year, and then all these other factors started stacking on top of those to form a huge hurricane of additional factors.

• Silver and gold were named strategic and critical minerals in the Fall of last year.
• Trump will be naming a more dovish Fed head to come in mid-year for more rate cuts.
• China announced that they’d begin export controls on silver to start this year, which have now been implemented as of January 1st.
• Some large financial institution got on the wrong side of a large short position and was forced to cover and unwind, spiking the futures prices even higher.
• The US moved into capture and remove President Maduro in Venezuela over this last weekend, after a series of military exercises in the Caribbean Sea.

We reviewed the recent strength in the physical metals prices over the futures prices.

• There has been an ongoing backwardation in silver physical spot prices over the silver futures prices at the end of 2025 and into 2026.
• There has been a large arbitrage spread in favor of the Shanghai silver price in China over the COMEX silver price in Chicago for the last few weeks.
• He points out that the series of recent COMEX margin increases are being used during low-volume holiday weeks to tamp down the silver future prices, but yet they’ve just rallied right back higher again. Dave feels this is a different macro backdrop than when we saw this same process from the CME back in 2011 that marked the top of that prior cycle.

Dave notes that while many precious metals stocks have already gone up multiple-fold on a percentage basis over last year, that it has gotten to a point where many stopped reacting as much to metals prices that have continued moving to even higher levels.

• He notes that with the US stock market indexes having also kept hitting new all-time highs over last year that this has kept generalists from focusing much on resource stocks thus far.
• Dave recounts how the prior cycle started moving strong from 2001-2003, then consolidated, then moved even higher from 2005-2008, leading into the Great Financial Crisis of mid-2008-early 2009, before moving up even higher for 3 more years into the 2011 top.
• During that time the HUI index, the TSX Venture Composite index, and the HUI:S&P 500 ratio charts, all had a series of big moves that then consolidated sideways to down for a period, before building up the energy to then blast to even higher levels.
  • He believes we could see a similar pattern play out this time where mining stocks move big, then consolidate sideways despite rising prices, or even corrective moves, but then move in a series of rallies following that were more an more investor capital begins to pour into the sector.

Wrapping up we talk about where the gold and silver stock valuations are today at $100 and below for an ounce of gold delineated in the ground or $2-$5 an ounce of silver defined in development projects.

• We look to the recent takeover transaction of Probe Gold by Fresnillo for a mere $58 a gold ounce in the ground, over their 10 million ounce deposits in Canada.
• Dave highlights that he and his subscribers continue to hold full positions in AbraSilver Resource, despite being up 4X on their position, because he believes it may be in play as a takeover candidate in the year to come (after putting out their DFS and confirming Argentina RIGI approval). At present they are getting a little over $5 an ounce in the ground for a valuation, which is on the high-end of what other silver developers are currently garnering.
• We debate whether we’ll start to see higher valuations in future merger and acquisition deals, on the best development projects, considering the huge margins that the PM producers are enjoying at present.

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This content is for informational and educational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security. Investing in equities and commodities involves risk, including the possible loss of principal. Do your own research and consult a licensed financial advisor before making any investment decisions. Guests and hosts may own shares in companies mentioned.