Biggest loss in a day

Down over 100K last night.  Its the largest dollar (not percentage) loss I've ever had.

Mostly from metals: 34K from gold, 22K from silver, 15K from Platinum/Palladium, 8K from copper.

Silver down 28% looks like forced liquidation due to margin changes.

Part of this game is learning to deal with the volatility.

I'm still up over 200K this month.

Short term, I think theres a 40% chance that the metals and stock markets go down on Monday (more margin calls), and a 60% chance they bounce.  VIX is still below 20.

Long term, I am still bullish for 2027:

• Will hold my gold, as I'm expecting the bull market to continue.  Maybe after a few months of consolidation.  GVZ dropped a little yesterday but is still in the 40s, it needs to go into the 20s.
• Still buying copper.
• Look to sell my silver in the $100-$200 range.

Started to sell some gold

Gold is up 10% in the past week and 33% in the past month.

Crazy, but not a record.  I'm selling 1/3rd of Equinox.  Its the highest beta gold stock I own, and some of its upside has been removed by recent divestments.

Honestly, I have no idea when to sell.  Today could be gold's top, or it can go to 6000, 7000, or 10000.

There is no quantitive way to measure that gold is "too expensive" or "over owned".

Gold has no fundamentals. There is no "high price" where demand gets substituted or destroyed.

It is going up despite low inflation.

It has gone parabolic, and can go more parabolic. In the last month of the 70-80's bull market, it rose 66% in a month.

COT data tells you that its over owned, and has been over owned forever. GVZ has surpassing its previous peak before the correction in Oct - a mere 10% two-month correction. Even if you sold beforehand, you probably didn't get back in.

‌What can make it keep going up?

• Increased liquidity - especially China and Japan. People buy gold when their currencies are shit.
• CBs holding currencies down to offset their trade surplus wit the US by buying a neutral reserve currency instead of USTs.
• War or threat of war.

What can make it go down?

• Japan stops spraying liquidity (think its from BOJ issuing shorter term bonds)
• USD drops enough so no more trade defecit. Asian CBs no longer need to intervene in their currency markets.
• US successfully delevers, so USTs look more attractive.
• World peace. Old-Man-Xi dies (will happen) and his successor says he won't invade Taiwan (dunno). Iran regime overthrown (likely). Putin leave Ukraine (no sign yet).

Best I can do is look for signs of technical weakness or over-exuberance.  Like:

• Gold bugs telling people to "Have Fun Staying Poor".
• Gold doesn't rise on good news (good news for gold, ie: bad news).
• The price rise gets stupidly parabolic (like in the 70s). Or GVZ makes all time highs.

‌My gut feeling is that we still have some way to go. This is not yet like Crypto in 2021. But in a bull market, your gut feelings are probably wrong.

‌At some point, I have to say that "this is getting ridiculous", slowly sell my gold holdings, and maybe keep a small position just to trade. The trouble is, there are no numbers to tell you where that point is.

Start Selling My Silver

I bought Silver (SLV) eight months ago as a trade from Hedgeye.  Its up 3 times since then.  It was 2% of my portfolio, now its 5%.

When something goes parabolic theres no way to know when it ends.  You'll always miss the top.  Even a local top.  Hedgeye risk manages by frequent trading, but I don't like trading so I need another way.  Don't want to overstay my welcome and become like the sad crypto bros of 2025.

Fundamentally, for commodities, high prices cure high prices.  Demand destruction for silver in solar panels begins around  $100 to $135.  But supply incentives are harder to guess, as silver is a by-product of other metal mining:

Gold (10-15% of silver supply) has hit its incentive price.  Zinc (30-40%) is hitting it now.  Copper is nowhere near.  And of course silver mines (25-28% of silver supply) are incentivised.  So we have 65-83% of silver supply being incentivised.  The supply is not immediate - probably takes 9-15 years for a new mine to open.  But existing mines can increase output.

At $109 silver (tonight), we are at-or-near prices where demand replacement occurs, and at current silver/gold/zinc prices the majority of the worlds silver production is incentivised to produce more.   Neither will happen overnight, but it will happen.  I'm comfortable slowly trimming my silver position.  Sold a quarter of my holdings (pre-market), and will sell more if if rises.  It can still keep going higher.

Trader Ferg wrote a excellent piece about handling parabolic price rises.  Don't get too greedy.  Inner peace.

When would I sell my gold companies?  I don't know.  Gold is a currency, not a commodity, so has no fundamental price targets.

Sold Canadian Natural Resources (CNQ)

I've held Canadian Natural Resources (CNQ) since late 2022 based on excellent fundamentals.  Its an efficient low-cost producer in a safe jurisdiction, with effectively infinite reserves, that pays dividends and buys back shares.

But there's now political risk.  The upcoming July USMCA negotiations were already looking shaky:

• USMCA expires on July 1st.  In preparation, the USTR January report has listed areas of contention: lumber subsidies, diary protection, the digital services tax, imports rerouted from China, and fentanyl.
• 70-75% of Canada's exports go to the US.  Canada has no choice but to bend.  The issues can probably be worked through.  For example, the Digital Services tax has not been collected, and there are efforts underway to remove it from the books.  It depends on the support Carney can get.
• If the USMCA is not renewed by 1st July, it enters a 10-year "zombie state", whereby the three countries have to meet once a year for a "rolling renewal".  CNQ will be effectively licensed to sell 3/4th of their output to the US on a year-by-year basis.

Quick numbers on Canada's oil exports.  Most of their exports go straight to the US through the Mainline and Keystone pipelines.  Canada's total production is 4+m bbl/day.   The only way for them to bypass the US is through the TMX pipeline (890k bbl/day), and that is constrained as the port can only take up to Aframax sized tankers. So for long distances, they usually shuttle the oil to California to load onto VLCCs to China.   They may be able to dredge the port by 2027 to allow slightly larger Aframaxes in.  New pipelines are at least 8-10 years out.

Now Carney has gone to China and lowered tariffs on China EVs.  This is a slap in the face for Trump.  The US cannot tolerate Chinese influence on their neighbour.

I still think the USMCA is going to work out, but there'll be fireworks beforehand.  In between today and July, Trump will unleash tweets about destroying Canada's economy.  Canada is going to get bitch-slapped, then ass-fucked.  I may look to buy CNQ again when Canada rolls over or Alberta becomes the 51st state.