Gold Miners vs. Tech Stocks: A Major Market Rotation Underway?

0:15Trevor Hall: Rob, welcome back into the podcast. I literally am watching this tech drawdown and I can't, I kind of had like March 2020 vibes in my head when, you know, I had to go back and look at like, when does the circuit breaker kind of go into effect? But the NASDAQ's down four and a half percent. I don't think I haven't seen four. I don't remember the last time we saw four drawdown in the first couple hours. Actually, one hour of trading. um and that to be honest with you like we talked about connecting i'm glad we waited one day yeah to have this uh post-mortem midterm discussion because today's conversation is going to be a lot different than if we would have had it yesterday right absolutely man what uh the bullets are whizzing by i'm like oh man i'm in like three trades and i gotta get on with trevor but maybe it's better that way maybe it's more fun to have the bullets whizzing by and the market moving uh yeah this is this is some serious volatility you know and i kind of felt like yesterday was a little too was a little too placid like everything seemed a little too normal and now we kind of get the hangover on thursday and the and the ai tech fears start to reverberate as you know guys like bernie sanders get up on tv and start talking about their plans for the next two years, right?

1:51So we're in an emotional state. The country is emotional, the world's emotional, and the market is emotional, right? You know, who knows? Maybe Friday, the S &P could be up 2 % or 3%. You know, we just don't know.

2:05Trevor Hall: Who knows? Yeah, we don't know what the future holds. Let me, let's talk. We are going to talk gold and this, maybe it's a relief bounce in gold. We're going to talk about the miners. You know, gold's up while the miners are down today. per the GDX, which is quite interesting. We're going to table that. But I want to get your thoughts here. We kind of knew the stuff in the AI trade is completely overdone, right? We kept on calling it a bubble, not just guys like you and I, but like important macro analysts are calling the thing a bubble. Is this the catalyst? Is the midterm elections the catalyst to really begin this unwind and how volatile can it get?

2:45Well, I mean, we're here in the final years of the fourth turning, and I continue to use that as my baseline for understanding the market in the world today. and obviously donald trump in his second term he's the he's the the leader the figure the controversial um person that leads us into the crisis stage of the fourth turning and here we are we are in the crisis stage of the fourth turning with war in the middle east war in russia and Ukraine and, you know, Europe is in turmoil due to many issues of its own making. And now, you know, the U.S. is feeling it a bit as well, right? But, you know, I also kind of feel like as painful as Tuesday night may have felt for, you know, Republicans and right-wing um people in the u.s um we have to remember that when the government is split it's just a bunch of bickering and fighting but nothing actually changes right like nothing major changes and people who live in a parliamentary system may not completely understand this but in the u.s the president, you know, the executive branch has a lot of power, as we've seen, and he has veto power, right?

4:19So the president can complicate and make things much more difficult. And also, I'm sure the Democrats are going to make a big point in their next two years, you know, some sort of impeachment process to pull out the skeletons. I disagree with you. I actually disagree with you on that.

4:37Trevor Hall: Oh, really? Okay. I do. I do. I think that the last administration when they had congressional power went after the impeachment twice and it failed and that they lost power because of it. I think that – I don't think that that's where they – now, I do think that there are certain people in the cabinet that they could go after, but I don't think President Trump is one of them because he's done in two years. Yeah. Yeah, that's going to be a shame to see. That's my thought. It's going to be interesting to see. Maybe they wait. I don't know. Yeah, I don't have a super strong opinion. It just seems logical that they would do that, that they would do some sort of impeachment, you know, like at least in the House.

5:19And they would begin the investigations into ambassadors and cabinet members and his family members. But maybe you're right. Maybe that would polarize things too much and it might set them up for a hangover in 2028. So maybe if the Democrats are smart and they play some 3D chess, you're right. They'll hold off on that and just sort of let Trump fall on his face as he's been doing for the last year, essentially. I know there's not a show about politics, but obviously it's a time to talk about this. But obviously the people spoke, right? And I think that's all you need to really, you know, look at is the outcome.

6:06The fact that Texas has a Democrat governor, you got to be kidding me. You've got to be kidding me.

6:18Trevor Hall: So I don't actually, I don't find that all surprising to be honest with you. Like I, I, I can kind of say like, I saw this coming because it, and hear me out because the last few election cycles, Texas has more and more gained discussion about a potential blue wave. Beto O 'Rourke had a good showing the last time he ran for Senate. And like the last six years, every two years, a strong or, you know, there's been much more a stronger voice from the Democrats in the state of Texas. It was just a matter of time. Plus all of those migrations from the coast to Texas, that also is going to have an impact.

7:06Trevor Hall: You're bringing politics to Texas no matter what. So I'm not actually all that surprised. One of the things I am most surprised about is a stronghold of the red and Republican basis in your state of Florida. I actually thought that might, that is now the epicenter of the Republican Party now. Yeah, it is. It's moved from Texas to Florida. Yeah, so, and then we'll talk about stock market, but you're right. So, you've had these California people move to Texas in the last five years, and most of them are left-leaning. Now, maybe they're swing voters, like maybe they voted Trump in 2024, but they were so turned off by the last couple of years that they went back to what they feel more comfortable with.

7:53And they voted, you know, Democrat in 2026 here. You're right. So Florida, basically what's happened is a lot of New Yorkers, right-leaning New Yorkers moved to Florida since 2020. and just the governor we've had and some of the people who live here have made this a conservative stronghold also we have cuban population in south florida which is a very strong voting bloc and they support you know the republicans generally speaking now there's a little bit like we're seeing in texas the younger latino voters have gone a little blue here obviously we're starting to see a little bit of that in florida but still generally the cubans

8:40Trevor Hall: lean red yeah well in their history of communism out of cuba leans large or looms large excuse me yeah uh and so obviously there's there's some you know emotional ties to their political leanings on that as well and completely understood um where do we go from here now we have we're going to have obviously Democrats in the strongest position they've been congressionally since the Obama administration. I'm curious what this means for the U.S. minerals policy. And I have stated that President Trump deserves a lot of credit for really getting minerals reshoring, processing, mining back on track. My concern is with this mix of power that maybe that gets put to the side.

9:45Trevor Hall: I think it deserves a lot of credit. It can be made better. I'm hoping that it's made better. In fact, you can even make the argument that this would go back and be almost traditional democratic populist policies. You know, a lot too long ago, we saw West Virginian democratic coal miners. So it has been a thing in our recent past. So I'm just kind of curious, as a general thought here. I'm getting a lot of questions from people since Tuesday night, both on co.ca and Substack, about, oh, what does this mean for the mining industry in the U.S.? And generally speaking, I don't think it changes a whole lot, quite frankly.

10:33I really don't think in the next two years a Democratic Party is going to make it a priority to stand against mining, you know, in the U.S. You know, in fact, you know, if anything, they'll do the opposite. They'll support the industry because they realize it's in their favor to do so. And if they block projects that should go forward, the Republicans will use it against them in 2028 and say that they're, you know, oh, this is the extreme environmental, you know, this is the woke left that you voted against in 2024. They're back, right? So they want to get away from that woke version of themselves that had them lose big in 2024.

11:15And they smartened up in 2026. And I think they'll continue to smarten up. And they'll support mining. mining. They'll support projects like Tamarack, Talens Project. In Minnesota, a blue state, I bet that goes forward, right? In Arizona, a battleground state, they'll continue to support mining because it's important for the local economy, right? So I don't see them doing anything major to stand in the way in terms of reshoring and onshoring metals and mining in the U.S.

11:50Trevor Hall: that's not to say i do think there's potential investigations into some of the policies that were put in place through uh the the grift that we saw out of washington like i think that's on the i think that's on the dock for sure you know i think that i think i think they start investigating and that could have ramifications we've all known this is going on let's not pretend it hasn't It's been in our face more so. I'll tell you, Trevor, I won't say a whole lot, but obviously, you know, we both know a lot of people in a lot of places out there. I've heard some stories about the Trump sons that would make your blood curl or boil or whatever the expression is.

12:32It's bad. It's bad. Look, it's not proven. It's, you know, hearsay. It's third-party information, but I believe it. So some of that stuff is going to come out here at some point in the next couple of years, and it's not going to be good for them.

12:47Trevor Hall: Yeah, absolutely. Okay, moving forward, let's talk about gold versus gold miners. We saw a nice bounce yesterday. The bounce extended today, although it seems like gold is getting sold a little bit from its highs because of this liquidity event. Oh, there's a five-handle down on the NASDAQ as we speak. So we're seeing liquidation where people can liquidate now. There's probably some margin calls going on right now, people selling where they can. But the equities are completely underperforming the metal right now. Do you think more of this to come? Yeah, I mean, first of all, I'll say, before we talk gold miners, and I have some comments about the gold miners that I think you'll be interested to hear.

13:31But first I'll say the most obvious trade that I missed was shorting Tesla on Tuesday afternoon. And now Tesla is down 10 % today. QQQ, as he said, is down 5%. That was just kind of a no-brainer trade. Like, how did I miss that? Like, what's wrong with me? But there's probably a lot of people that are feeling the same way right now. Gold miner. So yesterday was a very important technical trading session. It may be the most important technical trading session of the year. I mean, at least, you know, the last couple of months, the very least. But how often do you see Newmont, the biggest gold producer in the world, the only one in the S &P 500, up 10 % in a single trading session?

14:17Now, it actually closed up 9.9%, so not quite 10%. But actually, if you do the back test on that, it's happened like four times in the last 20 years. When did it happen? It happened March 24th, 2020. What was March 24th, 2020? It was the turn after the COVID crash, after the gold miners had been bombed into oblivion the first three weeks of March. March 24th was the signal to buy them with both hands. And they ran hard for the next four or five months, right? So the gold miners gave a very powerful thrust buy signal on Wednesday. They gapped higher again today. We got earnings. We got good results from B2 Gold.

15:00That company is turning things around at Goose, and I'm really bullish on that. But obviously, we're seeing some profit taking out. I expect some consolidation here for the rest of Thursday and maybe into Friday. Hopefully, it doesn't get too much more to the downside, maybe down 1 % or 2%. It would be fine. It'd be a normal consolidation, especially when you consider that Wednesday was an up 8%, 9%, 10 % day across the board, across the sector. But I'm very bullish here. I actually really like this setup. And I'll just add a little more. I was trading gold futures Tuesday night after it became apparent what the result was going to be in the election.

15:39And there was some interesting call option activity at the end of the trading session on Tuesday in the GLD. So somebody was buying up a lot of GLD November calls, 390, 400 strike price calls in the GLD. Well, those calls are getting closer to in the money, and we still have another three weeks left until those calls expire. So it'll be interesting to see how those trades, but they're showing a pretty big unrealized paper profit right now. And gold trap the shorts under$4 ,000. So the door slammed shut Tuesday night overnight in the futures with a bunch of short covering that drove price back up before doesn't then continued further above 4100 to 4155 overnight and gold as you said is outperforming.

16:30So if we can fingers crossed get a weekly close above 4100 Friday afternoon weekly close above 4100. This is a huge technical victory for gold bulls this week. and I'll leave it there.

16:47Trevor Hall: Okay. Do we need to see follow through for the gold equities to get going? I mean, there's going to be an issue. There's going to be a battle between the fundamental issues in the relationship between the gold equities and the metal itself. But also if we see further drawdowns in the general market, that is going to weigh heavy on the gold equities itself. And I think that's the battle to watch here towards the end of the year. Yeah, no, I mean, yeah. And also in the juniors, we're still in the heart of November tax loss season. So that's another point to make note of. It might just be a bit of consolidation, maybe like one and a half steps forward and one step back sort of thing, you know, for the next couple of weeks.

17:29I hope the broader market doesn't crash. I don't I'm not that's not what I'm forecasting here. I think that, yeah, we're getting hit pretty hard today, but unless this extends into Friday and early next week, I think this is just sort of standard stuff. Just a bit of a washout, just a bit of a reset of risk, some degrossing going on here, some more degrossing going on in tech. I'm not that concerned by today. I think today is just kind of standard and to be expected. that I would get concerned if we saw more downside Friday and into Monday. And of course, I'm sure this weekend we're going to have the Black Monday people come out.

18:17I don't see a Black Monday unless, caveat, unless something happens in the Middle East, unless the unthinkable happens. If that happens, then I'm going to be wrong and we should just probably sell everything. but um assuming that the worst case doesn't happen i'm a buyer on the sell-off

18:39Trevor Hall: mm-hmm uh i resignate your concerns about the weekend and i'm not trying to be in a like a tinfoil hat guy rob you and i have known each other for a lot of years you know i'm not really a tinfoil hat guy but i do have serious concerns we know how um hawkish trump has been the last two years on iran that's obviously been evident and now that he knows that his power is waning into january it seems like the next month and a half if he was going to do something drastic this would be the time he would do this is the only time this is this is his window um but you know it's not without consequences trevor uh anything he does is not without some significant consequences for the country for the world for himself for his family for his final years on this earth I hope he considers it very deeply and thinks back to all the things he used to use as a platform about not starting wars in the Middle East.

19:40God willing. Yeah, absolutely.

19:44Trevor Hall: God willing. All right. Rob, let's do talk about tax law season here. Is that something hopeful? Hopeful tax law season, yes. Yes, yes. That's cheap stock. Listen, tax loss selling actually started in August. There are some deals to be had, but you kind of have to be patient here. Do you think buying, can buying start accumulating earlier than mid-December as it typically has? Or do you think people are going to be buying this dip here before then? i think you can start putting together your shopping list this weekend and you could start buying next week you could start gently you don't in tax law season you never buy all at once you don't buy it all in one day you know like you know like even if you're a really small investor with only like 10 or 15 000 buy 1500 at a time don't don't blow your load all in one day right because you're never gonna get the absolute low at just the perfect timing it's it's almost never gonna happen if it happens you're very lucky so you buy in tranches you buy one fifth or one fourth at a time and you space it out every every four to five days because you got the whole month of november and then early next month as well usually my a lot of people say oh tax law selling goes to the final day of the year.

21:13Like, I guess technically you could all, you can wait till the 28th or 29th and then sell everything and take, get your tax laws technically, but nobody does that. Smart people do their tax planning October, November, and certainly they don't want to be thinking about their stock portfolio when they're on holidays. So usually actually, I think, um, the, the tax law selling is, is done, you know, before the final couple of weeks of the year. And so that's why we generally have a bit of a lift around the holidays and into new year. The sector kind of the lead weight, you know, the boot is taken off the sector.

21:53And then people start to think optimistically about the new year and drilling programs and all that fun stuff. Right. So I think you have some time. There's no rush to go in here and buy your favorite junior that's been beaten down. But I think you can actually start to weigh it in next week, quite frankly.

22:13Trevor Hall: NASDAQ now down over 6%. Getting close. Yeah, pretty wild. Tesla down 11%. Man, how did I miss this trade? This was like the most no-brainer trade. Texas went blue and Tesla's in Texas. I'm going to have to go sell my position.

22:40Trevor Hall: All right, my friend. Good to see you. It was good to see you in New Orleans, albeit quickly. Yeah. Was it New Orleans I saw you? It was New Orleans. Yeah, it's all running together, isn't it? I know. I know, it's kind of crazy. Yeah, you are in London. Are you going to Europe now? Yeah, I'm off to Zurich this weekend for precious metals, then to Germany for Deutsche Goldmast, and then a site visit. A site visit, first time in Africa. Oh, are you going to Southern Africa? I'm going to Namibia Oh my God, they roped you in for Namibia Nice Yeah, roped me in It wasn't too difficult All I needed was an invite I heard great things about Namibia And actually if you go on Goldfinger Capital Substack There's an article about Namibia that was recently published So everybody check it out All right, there you go I'll report back to you.

23:35Trevor Hall: I'll give you a shot when I get back. Very cool. All right, my friend. Good to see you. Thanks so much. All right, guys. More to come from Mining Stock Daily. And we also have our long form airing tomorrow morning featuring Richard Lockwood, a London icon within the mining market. Five decades of mining markets experience. So that was a great interview as well. It'll be airing Friday and into the weekend. All right, everybody. More to come. Stay tuned. The information presented should not be considered investment advice. Mining stock daily and affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein.

24:13Trevor Hall: Please do your own research or speak with a licensed financial representative before making any investment decisions.