Gold, Silver, and Copper Hit New Highs

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00:00Yeah, I mean, I guess I was alive for the Hunts Brothers, but I don't remember it well.

00:04Yeah, it seems like it's almost unsustainable at this point, because what else could drive it higher?

00:08And I think that's what people are racking their heads about.

00:10And we've talked about positioning now being stretched, either RSIs or call SKU.

00:14All that now, to me, tells you it's just a very tough proposition to buy at this level and expect to have further gains.

00:21But look, it's not just the geopolitics. It's not just the Fed.

00:24You have a lot of supply and demand issues.

00:25There's mining issues. There's production quality issues for silver, which is helping contribute to that outperformance.

00:31But overall, you just can't grab as much.

00:33There's been underinvestment, and you can't grab as much as you need right now to match the demand, both the physical and the speculatory stuff.

00:39Well, so Ed Yardeni was making the point this morning that it's one thing to look at gold, but central banks, for example, aren't buying silver.

00:45They're not buying copper.

00:47I mean, what's driving those gains in the sense that, you know, it's not really industrial production either, is it?

00:55Right. Well, a little bit, because copper and silver both get the bid from the electrification of all things.

01:00Copper clearly the forefront of that push, which we've had now for multi-years.

01:04The AI story with the data warehouse, data center build-outs, and all the kind of grids needed to connect them is big on copper.

01:11And silver is big on the solar panel stuff.

01:13So there is an industrial demand pulse.

01:15You've got the jewelry side of it, too, because as people can't afford gold, they switch into platinum and silver.

01:19So there is that retail bid from India and China and everywhere else in the world.

01:23So there are actual things in the physical level that give you confidence that this is a trade that has some real fundamentals.

01:29But, again, I think what's happening is people are chasing on there's a lot of speculative froth either in futures or in option markets,

01:34which are helping drive this exponential chart look now.

01:37How – I mean, when I hear about copper, I think of China just because it used to be, you know, Dr. Copper.

01:45When China was growing copper demand as well, they were building, you know, all the ghost cities and everything.

01:51How related is that, and how is China doing right now?

01:54Yeah, so the actual marginal buyer right now is funny, us, because of the worry of tariffs.

01:58So if you look at the COMEX LME spread or even the Shanghai, it's as wide as it's usually ever been.

02:03I think we've come off from summer highs, as Trump clarified, where that tariff rate would be.

02:07But to your point, the Chinese industrial production bid for copper right now has cooled because, obviously, we know their growth is slowing.

02:13Everyone's moving copper here in America.

02:14We have the highest inventories we've ever had here with expectations that that gap, because of the tariff,

02:19will be finalized at some point in the future, making it the good trade to do.

02:23Michael, talk to us about the difference between copper on the LME and copper COMEX, for example, or elsewhere,

02:28in the sense that, you know, we saw that squeeze, remember, in London earlier in the year.

02:34I mean, have we seen prices continue to go higher even after a squeeze?

02:38Isn't that very intentional?

02:39Again, we had the correction as they had clarification of what the tariff would actually look like.

02:43But there's still an uncertainty of where that final rate will be on the processed copper.

02:48And to your point, it's come back up after this massive drop.

02:51It's an interesting chart if you look at that spread between the two.

02:54But, you know, it's all interchangeable.

02:56It's just a matter of getting a ship and bringing it over here because it's effectively more economical.

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