News

Key takeaways

• Gold and silver lead 2025; platinum followed. Miners magnified gains
• Drivers: rate-cut bets, central-bank demand, silver’s industrial pull, tight supply
• Risks: jurisdiction, cost inflation, execution, and volatility

Why metals are moving now

Gold hit a record at USD 3,547, up 34% year to date. The bid reflects expected September Fed cuts, questions over Fed independence, and a more fractured world. With long-end yields high and the dollar soft, bonds lost defensive appeal, shifting flows toward safe-haven commodities. Risks, however, remain: a hawkish Fed pivot, a sharp dollar rebound, a drop in long yields, or a positioning unwind. For the full run-down of drivers and challenge points, read: Gold breaks to fresh record as investors seek alternatives in a fractured world | Saxo.

Silver finally cleared USD 40 for the first time since 2011. Platinum rallied through summer on China demand and supply discipline. For more, see: Silver powers past USD 40 to 14-year highs | Saxo.  The common thread: softer real-rate expectations, steady central-bank buying, and silver’s tight balance from solar and electronics.

Under the bonnet: what’s driving strength

Real rates set the tone. When expected real yields fall, gold’s opportunity cost drops and demand improves. That bid often spills into silver and, with leverage, into miners. On fundamentals, silver’s industrial demand remains firm—photovoltaics, power electronics, and sensing—while mine supply grow slowly. Platinum has rebounded enough to lift many operations back above cash costs, but not enough to trigger new capacity. That supports prices. Positioning then did the rest: with few bulls on and tight physical markets, even modest buying pushed prices through resistance. When metal prices rise, miner shares often rise more because costs move slower than prices, so profits swing harder. Read more in Ole Hansen’s latest COT note, COT report: Modest gold and silver longs fuel breakout momentum | Saxo.

Know your levers: costs, gearing, ballast

AISC 101. All-in sustaining cost (AISC) wraps cash costs with sustaining capex and overhead. When prices outrun AISC, cash flow compounds fast—until it doesn’t. That is the essence of miner torque, earnings sensitivity to metal prices because costs move slower than prices.

Gearing 101. Gearing = financial leverage. Debt magnifies equity swings. Fixed interest costs make profits rise faster in upcycles—and fall harder in downcycles. In miners you get two levers: operating leverage (AISC vs price) and financial leverage (debt). Watch net debt/EBITDA, interest cover, maturity walls, and floating vs fixed rates. Low gearing cushions volatility; high gearing boosts “torque” but raises covenant and refinancing risk.

Metal ballast 101. “Ballast” = a stabiliser in a portfolio. Gold—and sometimes silver—tends to move differently from equities in stress. It pays no yield, so the “cost” is the foregone real return elsewhere. When real yields fall or the dollar softens, ballast strengthens. In policy or geopolitical shocks, bullion often falls less or even rises. That steadies total returns and gives you dry powder to rebalance.

Execution counts: cost discipline in focus

A strong tape rewards operators that keep costs in line:

• Agnico Eagle (AEM): record free cash flow, net cash, and reiterated 2025 cost and capex guidance.
• Pan American Silver (PAAS): dividend raised; still on track to meet 2025 production and cost guidance.
• Alamos Gold (AGI): sequential declines in cash costs and AISC drove record operating cash flow.
• Fresnillo (FRES LN): adjusted production costs fell about 20% year-on-year in H1; management flagged “rigorous cost discipline.”
• Impala Platinum (IMP SJ): reinstated a dividend and cut capex, signaling capital discipline as prices recovered.
• Valterra Platinum (VAL SJ): the Anglo American spin-out kept unit-cost focus and avoided aggressive growth despite the rally.

These are examples, not endorsements. Always re-underwrite mine-by-mine cost curves and jurisdiction risk.

What to watch

Macro: The Fed decision on 17 September 2025 and the path of real yields—gold’s primary headwind or tailwind. Micro: Q3 production updates from large gold, silver, and platinum (PGM) producers—watch grades, AISC, and sustaining capex. Physical: Silver’s supply-demand updates and PV installation trends, including any “thrifting” of silver loadings. Policy: Signals on Mexico’s permitting regime and South Africa’s power stabilisation—risk premia can change quickly.

The risk map: where it can bite

Country risk is real. Mexico tightened the mining regime in recent years, lengthening permitting and adding uncertainty for silver-heavy portfolios. Peru’s periodic unrest can clog logistics. In South Africa, platinum-group miners remain exposed to power reliability and policy shifts. Cost inflation persists in energy, labor, and consumables; it usually falls slower than metal prices in a pullback. Financing risk matters too. If prices wobble, equity and debt windows narrow fast for single-asset developers. The punchline: miners add diversification across macro factors, but concentration in a few countries can compound shocks.

Access points: metals vs miners You can own the metals for stability or the miners to magnify moves. Pairing both can smooth the ride.

• GDX (gold miners ETF)
• SIL (silver miners ETF) Check fund factsheets for fees, holdings, and jurisdiction mix.

  Bar chart comparing YTD returns of gold/silver/platinum vs their miners

Investor playbook

• Size the sleeve. Fix your allocation to mining/commodity to avoid chasing.
• Blend ballast and torque. Mix metal exposure with mining stocks or ETFs to balance stability and upside.
• Stress-test rates. Re-run theses at higher real yields and a slower Fed path.
• Audit country risk. Map holdings to Mexico, Peru, and South Africa. Track permits, power, labor and political stability.
• Use rules. Stage entries, rebalance on metal-to-miner gaps, and pre-define exits.

What it means for investors

The case for precious miners rests on two engines: gold’s macro hedge, and cost-disciplined miners that turn high metal prices into cash flow. In 2025, falling expected real yields and tight supply did the heavy lifting. The main risks are jurisdiction and sticky costs. The main drivers are central-bank policy and silver’s industrial pull. Near-term, the Fed’s call on 17 September and miner updates on costs and grades will steer the narrative. Blend stability with upside. Define the risk, then let consistency compound. Your balance sets both risk and reward. After a strong run, entry prices are higher, so pullback risk rises even if the thesis holds.

Listen to the full episode now or follow the Saxo Market Call on your favorite podcast app.

Today’s links

Ole’s piece on Trouble at the Fed Supports Gold and silver. FTAlphaville article chiming in with headline of the day yesterday on the implications of Trump’s go at controlling the Fed: Pray for the US Treasury Market - Thank you for your attention to this matter.

After our Ole’s appearance on the MacroVoices podcast the prior week, one of our favourite and outspoken macro strategists Michael Every is out with an appearance on the podcast last week.

Found it! The Apple white paper suggesting the LLM’s (Large Language Models) used in AI are incapable of reason.

A Chat GPT prompt for all US defense companies with a market cap of USD 5 billion or more (can’t vouch for quality of results, but probably 90%+ of relevant names) if you are interested in delving into the kinds of names that the US government might like equity stakes in after US Commerce Secretary Lutnick’s comments on investing public equity in defense companies yesterday.

Tenth time was the charm as Starship 10 succeeds on all parameters - watch the spectacular launch here. Still needs many repeats and much heavier payloads to prove that it is reliable after so many birthing pains to date. Oh another thing - not sure what it will be useful for except for robots and large scientific launches into deeper space as humans are never leaving earth anytime soon, least of all to live on Mars, which they can’t.

Saxo Equity Strategist Ruben Dalfovo previews Nvidia earnings and CrowdStrike earnings reports with a long-term investor perspective.

Chart of the Day - Alphabet (GOOGL) broadening top?

A great test of a spectacular technical formation in coming days and weeks will be whether the classic broadening top formation that is forming in Alphabet’s stock price will resolve into a bull extension or bearish setup for the stock. According to pattern legend Charles Bukowski (that book is a favorite of mine), the bearish entry works more than the bullish one and is on a third touch of the rising line of tops, but it is not considered one of the better patterns. One of the problems with a formation like a broadening top is that it requires so many touch points to come out perfect. As you can see in the chart below the last time Alphabet was in a major bear market, it was on the heels of a broadening top pattern that didn’t quite complete the third top trend touch before selling off. Set for a repeat this time? We’ll see…

Questions and comments, please!