Third Wave of the US Dollar Cycle

From Crescat Capital

We think the gold panic on Friday on the announcement of Kevin Warsh as the new Fed Chair caused a healthy pullback from short-term overbought conditions in the precious metals markets. While Warsh may appear the least dovish among President Trump’s candidates, we believe he is indeed in favor of lowering interest rates in 2026, as the President has also affirmed. Investors in Crescat’s portfolio of undervalued precious and critical metals miners should not be too concerned. Our activist mining portfolio outperformed gold, silver, and the gold equity benchmarks, both on Friday and cumulatively for the month of January.  Performance was helped by our second largest position, Tectonic Metals, following company specific news, which rose 28% (gross) on Friday with spot gold down 9%. While this was only a snapshot in time, that’s alpha!  We think Tectonic’s Flat Project in Alaska may be one of the most exciting big new gold discoveries on the planet. Everyone should check out the latest drill results in their last two news releases.

Still, the gold correction was no small matter. We think it presents a buying opportunity. In fact, now, as much as ever, is the time for gold investors not to panic but to step back and look at the big picture.