I, too, am a vast consumer of Paradigm Press’s editorial. Yes, we flood your inbox with stuff. But I promise you it’s worth finding and reading the nuggets we publish. For instance, yesterday, my friend and colleague Adam Sharp wrote a peach of a piece about platinum in the Daily Reckoning. 

I think the tech rally is over, and the capital rotation into metals, energy, and resources has barely begun. This mirrors the real-life rotation from debt-aphixiating college education to high school vocational training and a $70,000 job at graduation. It’s amazing what you can do with wages when you don’t import cheap labor by the millions, isn’t it?

But I digress.

We’re entering a world where neither coders nor English majors will thrive. I call it The Age of Hephaestus, after the Greek god of artisans, blacksmiths, carpenters, craftsmen, fire, metallurgy, metalworking, sculpture, and volcanoes. (If you’re into Roman mythology, he’s called Vulcan.)

For the United States to catch up to China’s vast army of geologists and Russia’s Oreshnik missiles - no, the U.S. Armed Forces has nothing like them - the U.S. needs to get back to basics.

With those basics comes the need for a material that can bend to its designer’s will. That material is metal.

Gold has already taken off and may not correct for a long while. But whether by a weak economy or low demand, the rest of the metals complex hasn’t caught up yet.

Let’s explore the precious metals.

Gold

There’s nothing in this chart that says, “sell.” And I mean nothing. Before this week, it looked like we could correct, maybe even down to $2,800. But my new upside target is $3,926. Will we get there in a straight line? If the Fed continues to buy USTs, the answer could be yes. But a likelier scenario is a resting consolidation somewhere between here and there. We may get a $4,000 ounce before year-end.

For full disclosure, I own Kinross Gold (KGC), Freegold Ventures (FVL), Orla Mining (ORLA), and Integra Resources (ITR). 

Much of gold’s appreciation will come from the Fed’s balance sheet expansion and other Trumpian scares on the tariff front. But silver has industrial applications, too, and the slowing economy is probably pulling it down.

Silver

The most frustrating thing to own right now is silver. But the math says it simply must catch up to gold. As Adam noted in his piece for the DR, “During precious metal bull markets, gold hogs the spotlight early on. Silver lags behind at first, but often surpasses gold as the bull cycle progresses.”

Waiting for silver is like waiting for Gadot.

Silver’s chart isn’t as nice as gold's. But it’s still in an uptrend. When we finally get above $34.50, it should be smooth sailing to $50, then $65. 

Disclosure: I own Avino Silver and Gold Mines (ASM), First Majestic Silver (AG), Coeur Mining (CDE), Endeavour Silver (EXK), and now Discovery Silver (DSV). Yesterday, I sold AbraSilver (ABRA) to buy DSV - they’re roughly the same price - because I’m fully invested and liked DSV’s price action much better. ABRA just didn’t give me the return I was looking for.

Platinum

Platinum is part of the platinum group metals (PGMs), which include platinum, palladium, rhodium, ruthenium, iridium, and osmium.

Adam had this to say about platinum:

Platinum is a primarily industrial precious metal. It is far more scarce than gold, with total annual global production at around 179 tons compared to gold’s 3,300 tons.

Platinum is mostly used in catalytic converters, the part of a vehicle’s exhaust system which transforms toxic gases into safer ones. Platinum group metals have the rare ability to transform nasty exhaust products such as carbon monoxide into inert ones like carbon dioxide.

Interestingly, platinum is not “consumed” in this process. It is simply a catalyst with the ability to convert compounds. A very unique type of metal.

The platinum (and palladium) content is why catalytic converters are stolen from cars so frequently. It’s a quick way for a thief to make a few hundred bucks.

Platinum is also used in a wide range of industrial processes, including chemical, petroleum, and medical applications.

Platinum is widely used in jewelry, which accounts for about 24% of demand. It is the hardest precious metal, and resists scratches and weathering well.

Only about 10% of platinum demand comes from investors. But at today’s depressed prices, this overlooked asset is intriguing.

Platinum has been rangebound for years, but Adam noticed how the gold/platinum ratio has strayed far from its historical norm:

Gold is only going higher from here, so platinum has much catching up to do.

Disclosure: While Adam didn’t recommend a single stock for PGMs, I own Sibanye Stillwater (SBSW), a South African company with considerable political risk and price volatility. Tread carefully.

Palladium

Palladium fell off a cliff over the past two years but has bottomed. Funnily enough, it’s trading at nearly the same price as platinum.

Adam wrote:

Today both platinum and palladium are used in catalytic converters. Palladium is more common in gasoline engines, and platinum in diesel systems.

Part of the reason car makers switched to palladium was that it was a far cheaper option. But today they trade around the same price, so that advantage has diminished. Some auto companies are now switching back to platinum, but it takes a long time to shift supply chains and manufacturing equipment.

Regardless, diesel engines alone will prove steady demand for platinum for the foreseeable future.

Wrap Up

We’re living in an interesting time, when the world is changing from the virtual to the tangible.

Who saw that coming?

We’re entering the Age of Hephaestus, when our children are encouraged to learn about soldering, welding, and building with their hands. The days of creating an app to secure your future are over.

We must adjust our investment style accordingly. Chasing tech and biotech stocks may offer a lower probability of a higher profit than owning gold, silver, and PGM stocks.

It’s better to be a few days early than a few months too late.