Tech Cracks and Rotation beckon for goldcos

Summary of the Video’s Main Points (July 23, Mining Market Commentary)

1) Precious metals outlook for summer: volatile, but still bullish structurally

• Host Paul Harris interviews John Fenick (Fenick Consulting) about market conditions for gold, copper, and silver.
• Fenick says precious metals remain highly volatile day-to-day, but:
  • Gold is holding roughly around the $3,800–$4,000/oz area.
  • Copper and silver are also relatively steady versus expectations.
• He argues summer volumes are typically lighter and adds that the Iran-related conflict has hurt sentiment, likely extending into August.
• Silver level watch:
  • $50/oz is described as a key psychological level.
  • If silver breaks down below it, any downside move is expected to be short-lived (weeks at most), with a target range around $47–$50.
• Overall stance: gold remains in a bull framework and charts have not been “broken.”

2) Earnings season: mixed impacts for gold miners, with energy as a risk

• Fenick discusses expectations for Newmont’s June-quarter results and the broader gold-miner earnings season.
• Key considerations:
  • Declines in gold/silver prices could pressure earnings compared with earlier strong quarters.
  • Some miners also produce copper, which could help if copper stays strong (he notes copper was near highs).
  • Energy costs (including diesel/fuel inputs) are flagged as a potential negative factor for margins.

3) “Cracks” in tech: possible rotation tailwind for mining later

• Fenick argues there are signs that tech—especially semiconductors—may be weakening.
• Indicators and risks mentioned:
  • A potential barometer via the Philadelphia Semiconductor Index (SOX).
  • If small-cap/illiquid areas (e.g., Russell 2000 / IWM) also roll over, it could broaden the risk-off move.
  • Sharp tech drawdowns cited (examples mentioned: IBM, Netflix, Tesla).
• Thesis: if tech/AI cools further, it could enable a rotation back into miners later in the year, potentially into Q1.

4) Iran conflict + Fed policy: major overhang for miners

• Fenick characterizes the Middle East situation as a “huge overhang” for mining stocks.
• He describes a recurring pattern:
  • An initial rally after war headlines, followed by a reversal (referencing March performance).
  • “Good days” after mid-June tone changes, then renewed declines after Fed communications (he cites the first FOMC meeting of Jerome Powell—described as “Wars” in the discussion).
• He emphasizes that Fed minutes/FOMC dates can be especially impactful for sector sentiment.

5) Longer conflict risk, but no expectation of escalation through late 2026

• On whether the conflict is escalating, Fenick notes:
  • Houthi attacks targeting shipping and increased regional disruption.
  • News about U.S.–Saudi nuclear cooperation as a relevant catalyst for potential U.S. actions.
• His view:
  • He hopes for resolution, but investors should plan with scenario-based strategies.
  • He expects the war likely won’t run through November, tied to elections dynamics.
  • He suggests current rhetoric/attacks may be more about pressure than immediate full-scale escalation—while warning that real escalation would worsen outlooks.

6) Critical minerals: tungsten is a “super bullish” policy winner

• Trump’s executive action tightening U.S. defense supply chains against tungsten imports from China and other countries is framed as a major catalyst.
• Fenick says this should increase urgency for U.S. domestic tungsten development, noting China produces roughly 80–81% of global tungsten.
• Companies highlighted as potential beneficiaries:
  • Guardian Metal (GMTLF/GMTL) — strong preliminary economics (PFS referenced).
  • Western Star Resources (WSR) — drilling and permit progress in Nevada and project interest in New Mexico.
  • Spartan Metals (SPRMF/W) — drilling expected to produce results soon.

7) Corporate/mining deal flow: mining juniors still “discounted,” majors urged to act

• Fenick supports M&A activity but criticizes deals where majors take only small stakes.
• His preference: deals that give juniors control or majority participation (50%+ as he frames it) rather than 20%–30% style investments.
• Examples discussed:
  • NovaGold acquiring 40% of the Donlin Gold interest via an all-share structure to form a new NYSE-listed entity (presented as potentially positive due to long mine life and production profile).
  • Barrick buying a 9.9% stake in Kingfisher Metals (Fenick notes the market may prefer bigger/control positions, but still views it as an incremental positive signal).

8) Refining/processing emphasis: bottlenecks matter as much as reserves

• The discussion expands beyond mining to processing capacity.
• Fenick agrees U.S. policy is pushing domestic refining, and that companies pursuing downstream routes are becoming more important.

9) High-grade “Sunshine Silver” drilling + critical minerals vision

• A company update summarizes Sunshine Silver Mining and Refining reporting first drilling results post-IPO.
• Fenick comments that the reported grades (very high silver-equivalent numbers) are impressive and hopes the company continues progressing.

10) Palladium dispute: policy may be inconsistent

• An ITC decision regarding Russian palladium is discussed, including whether it affects U.S. pricing or poses an imminent threat.
• Commerce previously alleged unfair subsidies/dumping.
• Fenick suggests investors may see policy as not fully coordinated and notes he takes a value-oriented view in palladium/PGMs generally.

11) Silver project technical update: adding gold changes the economics

• New Pacific Metals provides an updated PEA for the Corangus project:
  • Adds a gold zone.
  • Increases throughput rate.
• Fenick says adding gold “spices” the project, but he also shared reasons he previously sold, including:
  • Jurisdiction concentration risk in Bolivia (plus leadership/experience concerns).
• On Bolivia: he references ongoing protests/economic concerns, but frames broader South America as potentially improving (with mentions of Peru, Argentina, and Colombia).

12) Investor strategy: diversification, patience, and risk budgeting

• Fenick emphasizes risk management:
  • With multiple picks, investors should accept that not all will work.
  • Sector corrections are often ~20–25%, but miners/juniors have tended to fall more (he notes miners/juniors were down more than broad indexes).
• He advises:
  • Chart/level discipline (if support breaks, don’t ignore it).
  • Staying calm and properly positioned.
• Overall market bet: gold + tungsten/critical minerals, rather than assuming tech will lead indefinitely.

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Presenters / Contributors

• Paul Harris — host, Kiko Mining “Digging Deep”
• John Fenick — Fenick Consulting; main guest/interviewee