Markets Are ‘Breaking Apart’: What It Means For Gold, Silver, Oil In 2026 | Ole Hansen
Summary
Commodity Cycle: Guest frames the setup as the start of a third major commodity bull cycle, with near-term consolidation but strong long-term drivers.
Gold Outlook: Bullish medium-term view with potential toward $6,000 after a needed consolidation; drivers include rate cuts, geopolitical risk, and US debt dynamics.
Silver Dynamics: Silver’s surge is attributed to speculative frenzy, options activity, and tight liquidity, with expected underperformance versus gold and a possible stabilization near $100.
Market Plumbing & Liquidity: Highlights risks from market “plumbing” breaking, thin physical quotes, and options-driven deltas (e.g., SLV calls) that can amplify violent corrections.
Rates & Yields: Lower policy rates support gold, while rising long-end yields may reflect debt risk premia that can also be gold-supportive despite historical headwinds.
AI & Equity Rotation: AI benefits are real but likely over-priced near term; rotation away from mega-cap tech is underway with more balanced leadership across markets.
Oil Outlook: Despite ample current supply and low prices, underinvestment and depletion imply higher prices over time (potentially $80–$90), with geopolitical risks as upside catalysts.
Transcript
I have to call it a specul speculative frenzy. Um because we all seeing we all seeing and hearing the same things. The plumbing is is breaking apart. The plumbing is uh doesn't work. Volatility is going up. Prices are going up. Banks are quoting less size to each other for physical. The risk of something uh something breaking is uh is really close. >> With gold out stabilizing around $5,000, will we head for another rally soon or is this the top? We'll find out what's next for gold, precious metals, uh, oil, and the entire commodity complex with Oleie Hansen, head of commodity strategy at Saxo Bank. Welcome to the show, Ole. Good to see you. >> Thank you very much, David. Thank you for having me. >> Been a fan of your work for many years, so it's a pleasure to finally be able to host you and talk to you today. Uh, let's start with your analysis on where we are currently in this commodity cycle. Now, you told me offline that we are perhaps starting the third commodity bull cycle since the 1970s. And I like to just pull up a chart to show you what that may or may not look like. So, uh, here we have, uh, let me just switch this to gold. Uh, if you can take a look now, Ollie, uh, we are currently at $5,000. Uh, this would be, uh, well, this is not, uh, let's just take a longer term chart. um this would be the third major uh cycle peak since 1980 then 2011 uh then now and so if we want to discount two uh 2020 because it's only been uh a couple years and 2020 was not a huge rise relative to what we have now only if this is the third cycle some would argue that we're ex already exhibiting the cycle top as it's been stabilizing around 5,000. It's already corrected 20% in one day, which is exactly what happened in 2011 before it stabilized and then went down another 50% in the following year. Does this look similar to what's happening in 2012, Ollie? Well, first of all, uh clearly when you look at the chart, you you can't help suffering a little bit of vertigo because that straight line up that we've seen now in the past few months uh would would make anyone a little bit nervous and hesitant uh about getting in getting involved and and I think that's probably where we are right now that we are that we I think the underlying reasons for for holding gold are most certainly still relevant. They are still there. They are long-term and they are the reason why we're seeing investors moving towards the gold market. But at the same time having run as fast as we have in the short period of time, there is a there is an argument that we need to consolidate now and and just basically see how where where it takes us. I just put out a a on on on X early today just um just just a technical observation that I've had I've watched for many years. If you go all the way back to 2005, every time gold has moved more than 20% away from its 200 day moving average, we have we have on several occasions in the last 20 years since seen the correction in gold, taking it back down to uh to to to the 200 day moving average or or perhaps even overshooting to the downside. The uh the move we saw last month uh took us more than 30% away from the from that average and right now we're around 22. it that could indicate to me that we're still a little bit overstretched on a from a technical fund basis, but from a longer term uh basis. I think gold is still most certainly worth valid to hold. So if if someone asks me what to do at this point level, I'll just basically just take it easy. I would say um I would not if you hold gold sit with it. If you are looking to get involved, just just take it be a little bit patient here. See where see where it takes us. uh because it it just show a little bit of signs that we we may just need to see a longer or perhaps an even a deeper correction. But I see that I see that as a healthy sign because then we get this kind of uh vertical uh line out of the way. >> What is Saxo Bank's view on gold and what is their uh what is your forecast? Uh Oie, we have major banks in the US for example being very bullish. JP Morgan uh has updated its forecast now to $6,000 target um in a special report earlier February uh for end of year 2026. So 5,000 is not even the end according to them. What is your view? >> No, I think that's it's not most certainly not the end. We we had 5,500 but with the recent move where we actually basically all touched that level already we had to take a reook and uh with that in mind I think 6,000 is within reach in the next 12 months but it does obviously depend as well how deep the correction is going to be. If we if we're doing if we drop another thousand from here then then it will be a little bit harder harder stretch to reach within 12 months. But uh but I think the the the the reasons again for for diversifying and and looking at gold as a as a as a bit of a lottery ticket or safe haven or insurance premium that's for that's it's not a lottery ticket. That's if you buy a $20,000 call as I hear someone is buying right now in the gold market. That's a lottery ticket. But uh it's an insurance premium against something starting to crack elsewhere. and and I think we got plenty of uncertainties in the world right now both politically and economically that that warrants such cautiousness and and and that's that's why the the uh the potential for for breaking above the 5,500 again reaching up towards 6,000 uh can most certainly not be ruled out. >> Let's talk about these other cracks. The fact that gold has risen so fast so quickly, silver as well and then stabilized around current levels. Does that signal to you that there may be a little less uncertainty going forward? Perhaps there may be less volatility in the stock markets than a few months ago. We've already had major corrections in some of the MAG7 stocks in the last two months. slowly. >> Yeah, we're seeing we're seeing a very uh aggressive rotation right now in the US stock market and uh and and I'm I think once the dust settles, the market's probably run ahead of itself in terms of how much the AI rollout is going to mean to profitability and to jobs and and some of these company these um these tech companies potential earnings going forward. So I think we we probably gone too far at the at this point and there will be a realization. So we could see a rebound in the in the stock market, but at the same time the there are some there's also rotation going on. You can see the MAX 7, they're basically flat on the year. They're only up 10% in the last year. So when you have a a such a significant sector or or market cap that's not really performing that basically means investors around the world who invest into or automatically invest into a world index they they they end up holding quite a lot of these max 7 stocks and and I think there slowly realization that maybe some divers further diversification is is needed. So we're seeing a rotation within the US stock market but we're also seeing a rotation away from the US stock market. We're seeing emerging markets doing doing very well. Some uh some spots in Europe as well uh recovering but but generally the AI is I think at this point in time markets pricing in too much in terms of what what impact it will have. It will be have a major impact but it's not going to happen overnight and some of these stocks basically the drops we've seen more or less reflect that something is going to impact within the next 6 to 12 months. It's probably going to take longer than that. >> Okay. Okay, what is the signal relative uh when it comes to inflation uh so right now uh inflation has been stabilizing again the last CPI report from January in the US showed inflation headline inflation at 2.4% year-over-year slightly down from the previous month's 2.5%. And what does this mean for gold? Well, it means uh first of all that the that the pressure from the White House to uh to cut rates uh is probably an easier decision to make uh when we have price pressures easing. So um so the market is is now once again looking for at least two cuts uh this year uh before October and uh perhaps even uh on a good day pricing in three cuts before the end of the year. So uh so that that cut is back in in in in focus and and ultimately before we started looking at all the other reasons why gold started to rally in in 22 especially when central banks uh started to uh to buy up and they are not as interest rate sensitive as traditional investors were previously and also before Chinese investors really jumped on board. um we we had the interest rates being a key driver for for gold. that that one is still there because it it's there's no doubt that when when the funding cost comes down and the the cost of holding a non-paying non-coupon interest paying asset comes down then then that does underlying benefit and that also opens up the door for for some types of investors who are who are faced with this carry the negative carry and and and probably up until the the first rate cut started last year were not able to to invest into gold simply because the carry or the cost of of of holding was too high and I think That's also one of the reasons why ETF demand only really start to recover when when interest rates started to get get cut uh after inflation peaked. >> Before we continue with the video, let's talk about today's sponsor, Monetary Metals. 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Oie, what does this mean for uh precious metals if yields continue to rise? Will that put downward pressure on the price as investors flock to fixed income products? >> Well, if we go back 5 years, uh then the answer would definitely have been yes. uh rising interest rates also further out the curve meaning rising real yields uh is is not uh has historically been uh been bad for gold. But I think right now the the market is viewing the long end of the curve as much as a as a as a as as a focus on on the US on the outlook for the US economy and the US debt situation and uh we we've seen in we've seen situation in the last 18 months where yields have been long and yields have been going up but gold has been going up at the same time simply because some of the reason why gold has been going up is is this is the worry about the the debt situation and we're also seeing some divestments going on uh or investors around the world divesting the their holdings in in treasuries. So it's it's it's so the fact the yields are going can go up and has been going up at at certain points as has been as much been taken as a as a as as a sign of of increased risk in the in the government market and and with that in mind if we do see a further rise in in long yields from here even at a time where the short end yields will come down. So the curve is is steepening. I think that will still could or that will still be supportive for gold for for those reason that it's it's taken as as the market basically asking for a bigger uh insurance or bigger risk premium to invest in the long end of the US uh US curve simply because of the the debt creation that they currently seeing no signs that that there's any political will to bring it under control from either side of the aisle of the the Congress. So who will be contributing to gold's rise to the next level? Will it be central banks primarily? Will it be investors from Asia or investors from Europe and North America? >> I think all of them. um the central bank demand uh may start to slow simply because the uh the the value of that gold portfolio has risen to the extent it has and that basically means the percentage of their holdings in gold relatively to other assets in in most of that is is being in bonds has risen to the point where they may start to say well we don't need a big allocation into gold at this point in time given the high valuation we have on our gold portfolio or gold holdings so that may slow but I think underlying it's it will still be there. There are still central banks who has not been been buying into gold who may consider as as something they need to do in order to diversify. Asia remains a strong buyer and uh especially in China and as long as we don't see any any bottoming out in the property market in in China which has now been a downturn for the last four years and has been one of the major triggers for for investors moving into alternative assets away from properties into gold and silver. As long as we don't see any any recovery there then the investors in China will be looking for alternatives. Stock market has not been been performing that great either. So uh so we need to see that uh that change in in in China and until it does then demand for gold and silver I'll say especially gold will continue to uh to remain strong and then just to look across the world asset managers are still under allocated in gold. Even 12 months ago many asset managers had no gold in their holdings in their portfolios. That was only until I start receiving phone calls from the investors asking how much gold do we have and and when the the answer was zero then that basically started to to bring some some changes and I think we that is still a a process that is ongoing and and it's also one of the reasons why I I strongly well strongly I believe stronger in gold than I do believe in silver at these levels simply because gold is is a monetary metal it can go to 10,000 20,000 it doesn't really matter silver cannot go much higher before industrial demand starts to be negatively impacted and that basically means it's only investors that that can then carry it forward and there will be scrap coming back into the market. So I think the next the next rally when we see that I think will be gold driven once again with silver potentially struggling if we got start to get back to 100 and above 100. Just on that note before we talk about silver, will we have a scenario where retail investors from the west matter more than the Chinese buyers in the next couple weeks? Right now it's lunar holidays and so for China and uh and Chinese speaking regions we have uh 10 days of no trading activity. What kind of data will you be looking for? Well, that's a really good question and good point, David, because we are we we have seen in the last 12 to 18 months that the that the east has been demand from the east has become increasingly important that the traditional investors in the west have have kind of yielded the passed on baton to to investors in the east especially in China and now with those markets closed and uh and also ahead of that we saw this a lot of speculative frenzy both into gold and especially silver. some of that was rolled back or scaled back ahead of this long holiday break. Who who wants to carry risk when you can't can't get in or out for such an extended period of time. So the next week will be interesting to see how how the metal how the metals perform. I I think there could be a risk that we could be drifting lower um simply because we don't have that uh that that pull. But at the same time when we get back uh in in a week's time or so and we get into early March that's really when we need to uh I think we should look to that period for to get the a feel for the the true and underlying strength in the market. The next kind of two weeks will probably be quite a little quite a bit of noise because we simply don't have all actors uh in operating in the market. So, uh, so I'll be just probably be sitting on my hands a little bit here for for the next week or so till we at least get the Chinese investors back and see how they respond to whatever price level that they meet when they come back. >> Let's talk about silver. Now, you wrote that uh there's a large short position in uh in uh in silver from the from the Chinese side. So, take a look at what you wrote for Saxo Bank. Uh, positioning matters again beyond seasonal effects. Growing attention is being paid to positioning dynamics in China's futures market. Recent reporting by Bloomberg has identified Zonkai futures linked to veteran trader Bianing as holding what appears to be the largest net short position in SHFE silver. The reported scale equivalent to several hundred tons of silver is notable in the market that a structurally small and prone to sharp price dislocations. You wrote this uh February 5th, right pretty much a day after the big uh silver draw down. Um, so let's talk about the short position. Is it still relevant 2 weeks later? >> That's that's a good question. Um, and and yes, I mentioned it because it was reported and uh and it's just interesting to see how uh how how the this position this kind of size can be can be juggled around in a market which is relatively small. Um and I was actually from from when I read that I was actually mostly more worried about a squeeze to the upside simply because once it became known we saw that in nickel a couple of years ago where where there's a massive short that was uh basically caught by by the exchange raing margins and so on. But um so far we hasn't really seen any any major major impact. But um I'm I'm still a bit uh perplexed that uh if there is really is a position of a short of this size considering how the market's been been behaving recently. But uh but it it it just goes to show that has been a lot of speculative interest coming into the market. Uh this is one single big short, but against that a major amount of uh of small longs all adding up to a major long uh that really helped drive these uh drive silver to the to the extent it big did back in January to the to the point where basically it ran out of uh it ran out of oxygen and ran out of uh runway and and it had to stop and we had to see a correction. Well, because also simply at that point the plumbing broke and I know there's a lot of uh physical only focused traders who who hate the paper market and say we we just need to kill the paper market so we can we can get a real price discovery. What but I think I'm I'm sorry to say without the paper market we don't have we don't have any discovery at all because it is really the the the liquidity provider to the market and a short in the futures market maybe a long in the cash market. So you never really know exactly what the what the what the position is. But what we did know what we did note um in towards the end of January and and actually I sent out a warning to our clients on the Thursday morning when uh when they started to correct in this in the afternoon timing wise that was not something I hadn't visited at all. But I I just sent out a warning simply because my traders were saying the plumbing is is breaking apart. The plumbing is uh doesn't work. Volatility is going up. Prices are going up. banks are quoting less size to each other for physical and that basically means we into a situation where where where the risk of something breaking is is really close and we saw that as well with the with the significant amount of call buying going into the SLV ETF as someone had to sell these calls and those who sold the calls had to cover their delta by buying silver and as the uh these prices more or less moved into moved into the money within very few few trading days because the rally was as strong as it was, these guys end up with a massive long delta that uh that suddenly had to get unwind when the prices corrected and into a market where there's no liquidity. So, so when the plumbing breaks then we we all have to worry because then we uh we may if you're long and you may enjoy the move but uh but the correction can be very very violent simply because liquidity disappears. >> Yes. Well, investors are also concerned about a potential squeeze on the COMX. So, Comx registered uh silver dropping below 100 million ounces. According to this particular article, official depository statistics from the COMX dated February 11th confirms a major draw down in silver stocks. The exchange reported a single day negative adjustment of 3.2 million ounces in the registered category. As a result, total registered silver fell to 98 million ounces. That level is below the closely watched 100 million ounce threshold. Um you've written about this before. How likely is it that we do get a scenario uh in which the Comx does not have enough silver to cover demand? In other words, a silver squeeze. Is this something that we should be watching for? >> I think it's something we should be uh slightly worried about, but at the same time, it's not something that I think will happen because ultimately we have to remember that Comx sets the rules and if they if if they need to change the rules in order to avoid it happening, then they will. Um what right now we are seeing open interest in the March contract coming down fairly fairly hard. It did it did slow down a bit on Friday. There was not a much that big a reduction in in in the March open interest and that does clearly needs to come down quite significantly in the next couple of weeks. But we also have to remember that the it is not on the actual first notice day that uh that we we look at it it the notice period last runs for a whole month. So there is there's quite a lot of time for for for these uh for the both long and shorts to be be reduced. So I'm not too too concerned that it will happen. But there's no doubt that with the kind of interest we see in the silver market and with the with the inventory levels or the deliverable uh stockpile as as low as it is then the mark will if if it's if it's no problem if there's no problem in March then the investors will look towards May and say well then maybe it might be May when when things uh when things happen. So we need to see inventory levels uh start to move up again. They have been moved to London in in recent weeks. Well, there's been a draw in the comx market into the London market which inadvertently has actually helped stabilize the market because liquidity is returning to the physical market and that's helping to bring some of the uh the the the lease rates and the the carry rates uh more under control but um it is something we need to watch but at this point in time I'm not I'm not too concerned. I think the open interest will continue to come down and come down fast in the coming days. Well, in your opinion, what was the major contributor to silver rising dramatically from $30 just uh $35 uh in September to $50 shortly after and then a straight line from $50 to $100 in the matter of two months. Um that may have some people say that that may have not been purely higher demand. It's not possible within a short amount of time if it's purely demand driven. It must have been a structural deficit or perhaps a major shortage somewhere that drove this up. What do you think? >> I think it was speculation about a major shortage that uh that basically collectively helped drive a lot of uh small investors into the market. uh um and and if you if you if if if there's enough buying at the same time in in even though it's smaller amount then it all adds up and and when you get this uh extreme amount of of buying in the call in in call options uh on some of the major major ETFs then then the move starts. I think actually when we moved up towards the $50 that at that that point we did see some buying from uh from industrialists uh industrial users simply because normally in normal markets if you the best cure for high price is a high price because it it lowers demand but this point the when we at the same time talking about the the potential deficit there could have been some some industrial demand simply because they felt they had to buy it in order to ensure that they didn't run out of silver for for the coming period. So I think that was part of the the initial phase of the the rally when we when we broke 50. But then uh but but then the acceleration we saw when we we moved above that was simply a market where liquidity was starting to to dry become uh dry out and that meaning it was it was a lot easier to uh to to push it at the same time. you really want and and at the same time I think there's also attempts to sell into it which then got stopped out and that's what we see when we have a bull market that quite a lot of the time quite a lot of the buying that takes it to new highs are shorts that need that got got it wrong and need to get back in or get out get out of their shorts. So it's just a combination of of many many different things. We are seeing the we are we still need to uh to see whether what the impact on the demand side will be but also the supply side because um so far this year the saw the sil institute recently uh come out with a forecast looking for a deficit of around 2 was it 20 I can't remember now >> two I can't remember the number but uh >> that's okay it was um >> it was when we look at that that obviously on on paper looks uh looks pretty uh looks like a high number, but we need to work out what kind of industrial uh demand destruction impact these higher prices will have. And I think it'll probably take time because first of all, industrial users will pass on the increases to the consumer. And if they start to say, well, we're not going to pay pay these levels, then eventually production is going to be negatively impacted. And that could slow lead to a slowdown in in industrial demand much more than than what we we seen we've seen here. >> I mean the second time. Yeah. Go on. >> Oh. Oh, sorry. I was going to say well look yes we we do know that the silver market has been in a deficit for quite some time according to the silver institute but the silver institute has been sorry has been publishing a deficit number for many years now. Uh, and what's taken people by surprise is the fact that this move happened this quickly, this suddenly. How would you explain that? >> Simply, well, I I have to call it a specul speculative frenzy. Um, because we're all seeing we're all seeing and hearing the same things. And then um and not not to um not to look uh look in in in in different directions but um there are some there has been we we've seen a bit of the the squeeze mentality and we saw on with Bitcoin as well in in in in the past 5 to 10 years where where groups basically they're all talking about some some elusive numbers that we can reach and obviously if someone if if you start thinking well the silver can go to a thousand and it's only trading at Asia of you want to be in get involved. And so with that in mind, I think it's it's very healthy that we're just seeing a bit of a reality check now on on prices and just see it stabilizes and and if we've moved high again from here, well then it does indicate that the underlying demand is still there and then it's it's justified. >> Well, can you make the argument that the deficit in supply demand um dynamics don't really matter all that much because like I said earlier, I've I've been noticing that they've published the Silver Institute has published a deficit number for many years already. this price has basically stayed flat up until last year and then all of a sudden due to a speculative frenzy like you said the price shot up. So it had nothing to do with the fact that all of a sudden it's been in a supply deficit. It's been a supply deficit for years already. Oolie. >> Yeah, it has. And and what what probably uh helped trigger the the focus on this the deficit was the was the shipments of silver to New York ahead of or the threat of tariffs announced. We saw that in copper last year and we also saw a lot of sh silver suddenly being shipped and that helped create this tightness in the London market last uh August or October I believe it was and that's really when it when it kicked off in earnest and that was the tightness in the physical market because silver was was being shipped to to New York or to the US ahead of a potential tariff announcement and that's really when when the the focus resurfaced and then then the speculative interest that basically takes over and China has mostly been a been a major part of this. You only have to look at some of the uh some of the funds traded offered to Chinese investors. There's one that is the only pure silver uh fund is is just a mind-blowing. It just uh on the Thursday before the uh the Friday collapse in in January, it traded a 50% premium uh to the underlying value of of the positions it held. So investors in China were prepared to pay 50% above the underlying value. That tells me that this is purely speculative because if you just sat down and actually looked at what it is you're buying, would you buy 50? Would you pay 50% above an underlying price to get involved hoping that someone else would pay 50% or higher even even higher tomorrow? that that that is the biggest sign that when you get into a frenzy where you have to be a bit careful and the result of this was that the uh that the plumbing in this uh fund broke and on a Friday the market was shut and then it was basically limit down four days in a row 10% every day meaning it was just sitting there you couldn't get out so um so we need to watch very closely what's what happens in in China silver inventories in Shanghai is is also being depleted at this point in time so so we need to see supply come into the market from somewhere. Whether that's coming from scrap, that remains to be seen. But now now I kind of I've remembered the number as well because I was just reading a Danish paper the weekend and there's a small um there's a Danish um shop basically taking buying and sell selling silver mostly buying it and they basically um said that they have taken on taken in between four and five tons of silver in in the last 3 months and if you look at the global deficit I believe it's 2,000 tons then if four or five tons has come in just in Denmark which is a country which is not known at all for its trading in precious metals and you and then you and you you scale that up to the to the global space then there will be scrap coming into the market in the next three to four months and then we have to get a at that point in time I would have a better idea or better view of whether this deficit is actually something we need to be concerned about. >> And so finally on silver before we move on and close off the conversation on silver you said that it may not rise as much as gold. You're more bullish on gold. So where does silver land for you end of the year? Um, we're at $76 now. >> Well, I think I I I prefer to look at silver as a as a relative uh play to gold. I mean, that I know that a lot of people don't want they they look it as an individual metal, but I think the if you if you look at the the last 20 30 years, silver, the gold silver ratio has average been averaging around 70. I know that if you are really bullish on silver, you look way further back than that where the ratio was was perhaps as low as low as 20. But let's just focus on the last 30 years. The ratio has been around 70. Uh we we we dropped down I believe as low as was it 45 or something recently. Now we're back into the 60s. So based on based on on on gold going back to say 6,000 within the next uh next year. Um then I could see silver stabilize perhaps in the in the $100 region. But uh I'm I'm I'm well as you can get from this there. I'm certainly not the $200 uh band that that that some are looking at. Um, so 100 I think is is potentially as far as we can get. >> Did you you've been in the industry for many years. Did you anticipate yourself saying the sentence, I anticipate silver stabilizing around $100 by 2026? >> No, not at all. Um, I traded my first silver 25 years ago. Yeah, probably nearly 30 years ago for a hedge fund in London. And uh, that was we traded uh, gold back then at what, $300 and silver at less than 10. So uh so what we have seen this year is is most certainly phenomenal and and um I think there's probably still some people that in the years from now the time they'll look back and say well wow look at that peak we had before the collapse. I don't think that I think times now are different. I think we can manage to to hold on to most of these gains but uh but we we need to see uh probably first of all some consolidation but yeah it is a it is a a phenomenal level that we've seen. Finally, on uh oil, the fact that it's been trending lower ever since 2022, uh down pretty much 50% from its 2022 highs. What does that signal to you about the economy? >> Well, it's probably single mo mostly the fact that the that production has managed to to keep up with with demand. Um demand has been rising. Uh we we haven't really had any any down years. uh maybe except the recession around the the brief recession around co times but the demand is is has been going up and continues to go up. So uh so what we've been we basically I would say we've been blessed with cheap oil and cheap energy because oil at in the 60s historically inflation adjusted everything it is such a cheap uh cheap source of energy and um and the question is really how long will that can that be maintained for now we have a situation where there's enough enough being produced not only from OPEC but also from nonopc um some worries just in the short term about geopolitical risks uh to supply but but generally the market is uh is is supplied has has got ample supply. But looking ahead, we still have to if if the projections are that in that demand will continue to rise perhaps at a slower pace than what we've seen in in in the last 5 to 10 years. But if demand continues to rise and we have um the lowhanging fruit has been has been picked. So basically there's going to be depletion rates in the order of 6 to 8 million barrels on an annual basis. We need a lot of investment to go into the energy market, energy market in in order to ensure we have that oil coming out of the ground. And I think current prices uh is simply not high enough because all these energy companies they they witnessed an experienced inflation as well, labor cost uh cost of metals, cost of their raw materials, everything has been going up. So we need higher prices over time in order to just in order to ensure that we have supplies. So uh so I think the 60s I think we should enjoy them, enjoy it while they last. Um, if we look to if we talk again a couple of years from now, I would imagine that we're seeing uh oil trading at least up into the 80s, perhaps in the '90s. >> How significant is the Middle East uh relative to oil? Trump, President Trump over the past weekend has been advocating for a regime change in Iran, which is a 180°ree change in stance. By the way, a couple months ago in 2025, he said he's not supporting any a regime change. Now, he is vocally advocating for it. uh the battle group carrier has already been pulled back so tensions are dying down a little bit. But if Iran falls to a different regime, does that play a role on the oil price? Oh, it does indeed. Uh absolutely. Um and and that's really what the that's really what what makes it very difficult to predict because uh one thing is uh wanting a regime change in in a far away country called Iran. Another thing is what that regime regime change would mean in the short term for consumers in the US. And I know it's it's um it's a bit cynical to look at the look at this way, but we are in a year where where there's a midterm election coming up. And and US voters are I'm sure they care more about uh domestic fuel prices than they care about what happens in Iran. So with that in mind, I I struggle to see any any action that could uh could cause a disruption uh from the Middle East. And but if that does happen, then uh we're not going to look at the at Brents the global benchmark trading below 70. Then we will spike above 70 for for a period of time because not only Iran supplies could be impacted also supplies from other uh states sending their crude through the straight of Hamus close to Iran. So so it the next couple weeks will be extremely interesting to um to to to watch. But I I just I just have to remain cynical at this point in time saying, well, it's not in the US interest to uh or at least in the president's interest to cause gasoline prices to to move higher. Also, we saw the CPI, the inflation print last week. One of the reasons why it was lower than expected was low energy prices. So, at least that's one one uh one box that can be ticked in in terms of what has been promised and and delivered. So uh risking that I think is something that uh there really has to be some very strong arguments within the administration to go ahead and and cause a disruption that causes higher prices. >> Okay. Excellent. Thank you very much Ole. We appreciate your thoughts. Uh let's uh end the discussion here and we'll follow up next time. Where can we follow your work? >> Well as as you mentioned I work at Saxa Bank in Copenagen. We are global online uh online bank. We have our websites where where we post everything. So that can be found on on uh on home.saxinsights. Otherwise um I post everything I do also on on X and on Substack. My X is uh Ollie Ole S Hansen with an E and that's where I post everything besides what I post on the on the Saxo websites. >> Okay, thank you very much. We'll put the links down below. So make sure to follow the Saxo website there. Appreciate you once more, Ole. Speak next time. Take care for now. >> Thank you very much. >> Thank you for watching. 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Markets Are ‘Breaking Apart’: What It Means For Gold, Silver, Oil In 2026 | Ole Hansen
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I have to call it a specul speculative frenzy. Um because we all seeing we all seeing and hearing the same things. The plumbing is is breaking apart. The plumbing is uh doesn't work. Volatility is going up. Prices are going up. Banks are quoting less size to each other for physical. The risk of something uh something breaking is uh is really close. >> With gold out stabilizing around $5,000, will we head for another rally soon or is this the top? We'll find out what's next for gold, precious metals, uh, oil, and the entire commodity complex with Oleie Hansen, head of commodity strategy at Saxo Bank. Welcome to the show, Ole. Good to see you. >> Thank you very much, David. Thank you for having me. >> Been a fan of your work for many years, so it's a pleasure to finally be able to host you and talk to you today. Uh, let's start with your analysis on where we are currently in this commodity cycle. Now, you told me offline that we are perhaps starting the third commodity bull cycle since the 1970s. And I like to just pull up a chart to show you what that may or may not look like. So, uh, here we have, uh, let me just switch this to gold. Uh, if you can take a look now, Ollie, uh, we are currently at $5,000. Uh, this would be, uh, well, this is not, uh, let's just take a longer term chart. um this would be the third major uh cycle peak since 1980 then 2011 uh then now and so if we want to discount two uh 2020 because it's only been uh a couple years and 2020 was not a huge rise relative to what we have now only if this is the third cycle some would argue that we're ex already exhibiting the cycle top as it's been stabilizing around 5,000. It's already corrected 20% in one day, which is exactly what happened in 2011 before it stabilized and then went down another 50% in the following year. Does this look similar to what's happening in 2012, Ollie? Well, first of all, uh clearly when you look at the chart, you you can't help suffering a little bit of vertigo because that straight line up that we've seen now in the past few months uh would would make anyone a little bit nervous and hesitant uh about getting in getting involved and and I think that's probably where we are right now that we are that we I think the underlying reasons for for holding gold are most certainly still relevant. They are still there. They are long-term and they are the reason why we're seeing investors moving towards the gold market. But at the same time having run as fast as we have in the short period of time, there is a there is an argument that we need to consolidate now and and just basically see how where where it takes us. I just put out a a on on on X early today just um just just a technical observation that I've had I've watched for many years. If you go all the way back to 2005, every time gold has moved more than 20% away from its 200 day moving average, we have we have on several occasions in the last 20 years since seen the correction in gold, taking it back down to uh to to to the 200 day moving average or or perhaps even overshooting to the downside. The uh the move we saw last month uh took us more than 30% away from the from that average and right now we're around 22. it that could indicate to me that we're still a little bit overstretched on a from a technical fund basis, but from a longer term uh basis. I think gold is still most certainly worth valid to hold. So if if someone asks me what to do at this point level, I'll just basically just take it easy. I would say um I would not if you hold gold sit with it. If you are looking to get involved, just just take it be a little bit patient here. See where see where it takes us. uh because it it just show a little bit of signs that we we may just need to see a longer or perhaps an even a deeper correction. But I see that I see that as a healthy sign because then we get this kind of uh vertical uh line out of the way. >> What is Saxo Bank's view on gold and what is their uh what is your forecast? Uh Oie, we have major banks in the US for example being very bullish. JP Morgan uh has updated its forecast now to $6,000 target um in a special report earlier February uh for end of year 2026. So 5,000 is not even the end according to them. What is your view? >> No, I think that's it's not most certainly not the end. We we had 5,500 but with the recent move where we actually basically all touched that level already we had to take a reook and uh with that in mind I think 6,000 is within reach in the next 12 months but it does obviously depend as well how deep the correction is going to be. If we if we're doing if we drop another thousand from here then then it will be a little bit harder harder stretch to reach within 12 months. But uh but I think the the the the reasons again for for diversifying and and looking at gold as a as a as a bit of a lottery ticket or safe haven or insurance premium that's for that's it's not a lottery ticket. That's if you buy a $20,000 call as I hear someone is buying right now in the gold market. That's a lottery ticket. But uh it's an insurance premium against something starting to crack elsewhere. and and I think we got plenty of uncertainties in the world right now both politically and economically that that warrants such cautiousness and and and that's that's why the the uh the potential for for breaking above the 5,500 again reaching up towards 6,000 uh can most certainly not be ruled out. >> Let's talk about these other cracks. The fact that gold has risen so fast so quickly, silver as well and then stabilized around current levels. Does that signal to you that there may be a little less uncertainty going forward? Perhaps there may be less volatility in the stock markets than a few months ago. We've already had major corrections in some of the MAG7 stocks in the last two months. slowly. >> Yeah, we're seeing we're seeing a very uh aggressive rotation right now in the US stock market and uh and and I'm I think once the dust settles, the market's probably run ahead of itself in terms of how much the AI rollout is going to mean to profitability and to jobs and and some of these company these um these tech companies potential earnings going forward. So I think we we probably gone too far at the at this point and there will be a realization. So we could see a rebound in the in the stock market, but at the same time the there are some there's also rotation going on. You can see the MAX 7, they're basically flat on the year. They're only up 10% in the last year. So when you have a a such a significant sector or or market cap that's not really performing that basically means investors around the world who invest into or automatically invest into a world index they they they end up holding quite a lot of these max 7 stocks and and I think there slowly realization that maybe some divers further diversification is is needed. So we're seeing a rotation within the US stock market but we're also seeing a rotation away from the US stock market. We're seeing emerging markets doing doing very well. Some uh some spots in Europe as well uh recovering but but generally the AI is I think at this point in time markets pricing in too much in terms of what what impact it will have. It will be have a major impact but it's not going to happen overnight and some of these stocks basically the drops we've seen more or less reflect that something is going to impact within the next 6 to 12 months. It's probably going to take longer than that. >> Okay. Okay, what is the signal relative uh when it comes to inflation uh so right now uh inflation has been stabilizing again the last CPI report from January in the US showed inflation headline inflation at 2.4% year-over-year slightly down from the previous month's 2.5%. And what does this mean for gold? Well, it means uh first of all that the that the pressure from the White House to uh to cut rates uh is probably an easier decision to make uh when we have price pressures easing. So um so the market is is now once again looking for at least two cuts uh this year uh before October and uh perhaps even uh on a good day pricing in three cuts before the end of the year. So uh so that that cut is back in in in in focus and and ultimately before we started looking at all the other reasons why gold started to rally in in 22 especially when central banks uh started to uh to buy up and they are not as interest rate sensitive as traditional investors were previously and also before Chinese investors really jumped on board. um we we had the interest rates being a key driver for for gold. that that one is still there because it it's there's no doubt that when when the funding cost comes down and the the cost of holding a non-paying non-coupon interest paying asset comes down then then that does underlying benefit and that also opens up the door for for some types of investors who are who are faced with this carry the negative carry and and and probably up until the the first rate cut started last year were not able to to invest into gold simply because the carry or the cost of of of holding was too high and I think That's also one of the reasons why ETF demand only really start to recover when when interest rates started to get get cut uh after inflation peaked. >> Before we continue with the video, let's talk about today's sponsor, Monetary Metals. You already know why people hold gold, because it's real money. But what if your gold could do more than just sit in a vault? Well, that's where Monetary Metals comes in. They offer a way for you to earn a yield on your gold paid in physical gold. Through their leasing marketplace, you can earn up to 4% yield per year in gold. Instead of paying storage fees, your gold works for you. And because that yield is paid in gold, not cash, your stack grows no matter what the dollar does. Thousands of clients already earn a monthly yield in gold through monetary medals. So don't just hold it. Put it to work. Go to monetary-metals.com/lin link down below or scan the QR code here to learn more and start earning real gold on your gold today. What about uh if the uh long end of the uh yield curve, so the 10 year or the 30-year continues to rise oie? So um it's been uh the 10-year has risen substantially since 2020. It's been stabilizing around 4 4% 4 and a.5% um ever since the last couple years. Oie, what does this mean for uh precious metals if yields continue to rise? Will that put downward pressure on the price as investors flock to fixed income products? >> Well, if we go back 5 years, uh then the answer would definitely have been yes. uh rising interest rates also further out the curve meaning rising real yields uh is is not uh has historically been uh been bad for gold. But I think right now the the market is viewing the long end of the curve as much as a as a as a as as a focus on on the US on the outlook for the US economy and the US debt situation and uh we we've seen in we've seen situation in the last 18 months where yields have been long and yields have been going up but gold has been going up at the same time simply because some of the reason why gold has been going up is is this is the worry about the the debt situation and we're also seeing some divestments going on uh or investors around the world divesting the their holdings in in treasuries. So it's it's it's so the fact the yields are going can go up and has been going up at at certain points as has been as much been taken as a as a as as a sign of of increased risk in the in the government market and and with that in mind if we do see a further rise in in long yields from here even at a time where the short end yields will come down. So the curve is is steepening. I think that will still could or that will still be supportive for gold for for those reason that it's it's taken as as the market basically asking for a bigger uh insurance or bigger risk premium to invest in the long end of the US uh US curve simply because of the the debt creation that they currently seeing no signs that that there's any political will to bring it under control from either side of the aisle of the the Congress. So who will be contributing to gold's rise to the next level? Will it be central banks primarily? Will it be investors from Asia or investors from Europe and North America? >> I think all of them. um the central bank demand uh may start to slow simply because the uh the the value of that gold portfolio has risen to the extent it has and that basically means the percentage of their holdings in gold relatively to other assets in in most of that is is being in bonds has risen to the point where they may start to say well we don't need a big allocation into gold at this point in time given the high valuation we have on our gold portfolio or gold holdings so that may slow but I think underlying it's it will still be there. There are still central banks who has not been been buying into gold who may consider as as something they need to do in order to diversify. Asia remains a strong buyer and uh especially in China and as long as we don't see any any bottoming out in the property market in in China which has now been a downturn for the last four years and has been one of the major triggers for for investors moving into alternative assets away from properties into gold and silver. As long as we don't see any any recovery there then the investors in China will be looking for alternatives. Stock market has not been been performing that great either. So uh so we need to see that uh that change in in in China and until it does then demand for gold and silver I'll say especially gold will continue to uh to remain strong and then just to look across the world asset managers are still under allocated in gold. Even 12 months ago many asset managers had no gold in their holdings in their portfolios. That was only until I start receiving phone calls from the investors asking how much gold do we have and and when the the answer was zero then that basically started to to bring some some changes and I think we that is still a a process that is ongoing and and it's also one of the reasons why I I strongly well strongly I believe stronger in gold than I do believe in silver at these levels simply because gold is is a monetary metal it can go to 10,000 20,000 it doesn't really matter silver cannot go much higher before industrial demand starts to be negatively impacted and that basically means it's only investors that that can then carry it forward and there will be scrap coming back into the market. So I think the next the next rally when we see that I think will be gold driven once again with silver potentially struggling if we got start to get back to 100 and above 100. Just on that note before we talk about silver, will we have a scenario where retail investors from the west matter more than the Chinese buyers in the next couple weeks? Right now it's lunar holidays and so for China and uh and Chinese speaking regions we have uh 10 days of no trading activity. What kind of data will you be looking for? Well, that's a really good question and good point, David, because we are we we have seen in the last 12 to 18 months that the that the east has been demand from the east has become increasingly important that the traditional investors in the west have have kind of yielded the passed on baton to to investors in the east especially in China and now with those markets closed and uh and also ahead of that we saw this a lot of speculative frenzy both into gold and especially silver. some of that was rolled back or scaled back ahead of this long holiday break. Who who wants to carry risk when you can't can't get in or out for such an extended period of time. So the next week will be interesting to see how how the metal how the metals perform. I I think there could be a risk that we could be drifting lower um simply because we don't have that uh that that pull. But at the same time when we get back uh in in a week's time or so and we get into early March that's really when we need to uh I think we should look to that period for to get the a feel for the the true and underlying strength in the market. The next kind of two weeks will probably be quite a little quite a bit of noise because we simply don't have all actors uh in operating in the market. So, uh, so I'll be just probably be sitting on my hands a little bit here for for the next week or so till we at least get the Chinese investors back and see how they respond to whatever price level that they meet when they come back. >> Let's talk about silver. Now, you wrote that uh there's a large short position in uh in uh in silver from the from the Chinese side. So, take a look at what you wrote for Saxo Bank. Uh, positioning matters again beyond seasonal effects. Growing attention is being paid to positioning dynamics in China's futures market. Recent reporting by Bloomberg has identified Zonkai futures linked to veteran trader Bianing as holding what appears to be the largest net short position in SHFE silver. The reported scale equivalent to several hundred tons of silver is notable in the market that a structurally small and prone to sharp price dislocations. You wrote this uh February 5th, right pretty much a day after the big uh silver draw down. Um, so let's talk about the short position. Is it still relevant 2 weeks later? >> That's that's a good question. Um, and and yes, I mentioned it because it was reported and uh and it's just interesting to see how uh how how the this position this kind of size can be can be juggled around in a market which is relatively small. Um and I was actually from from when I read that I was actually mostly more worried about a squeeze to the upside simply because once it became known we saw that in nickel a couple of years ago where where there's a massive short that was uh basically caught by by the exchange raing margins and so on. But um so far we hasn't really seen any any major major impact. But um I'm I'm still a bit uh perplexed that uh if there is really is a position of a short of this size considering how the market's been been behaving recently. But uh but it it it just goes to show that has been a lot of speculative interest coming into the market. Uh this is one single big short, but against that a major amount of uh of small longs all adding up to a major long uh that really helped drive these uh drive silver to the to the extent it big did back in January to the to the point where basically it ran out of uh it ran out of oxygen and ran out of uh runway and and it had to stop and we had to see a correction. Well, because also simply at that point the plumbing broke and I know there's a lot of uh physical only focused traders who who hate the paper market and say we we just need to kill the paper market so we can we can get a real price discovery. What but I think I'm I'm sorry to say without the paper market we don't have we don't have any discovery at all because it is really the the the liquidity provider to the market and a short in the futures market maybe a long in the cash market. So you never really know exactly what the what the what the position is. But what we did know what we did note um in towards the end of January and and actually I sent out a warning to our clients on the Thursday morning when uh when they started to correct in this in the afternoon timing wise that was not something I hadn't visited at all. But I I just sent out a warning simply because my traders were saying the plumbing is is breaking apart. The plumbing is uh doesn't work. Volatility is going up. Prices are going up. banks are quoting less size to each other for physical and that basically means we into a situation where where where the risk of something breaking is is really close and we saw that as well with the with the significant amount of call buying going into the SLV ETF as someone had to sell these calls and those who sold the calls had to cover their delta by buying silver and as the uh these prices more or less moved into moved into the money within very few few trading days because the rally was as strong as it was, these guys end up with a massive long delta that uh that suddenly had to get unwind when the prices corrected and into a market where there's no liquidity. So, so when the plumbing breaks then we we all have to worry because then we uh we may if you're long and you may enjoy the move but uh but the correction can be very very violent simply because liquidity disappears. >> Yes. Well, investors are also concerned about a potential squeeze on the COMX. So, Comx registered uh silver dropping below 100 million ounces. According to this particular article, official depository statistics from the COMX dated February 11th confirms a major draw down in silver stocks. The exchange reported a single day negative adjustment of 3.2 million ounces in the registered category. As a result, total registered silver fell to 98 million ounces. That level is below the closely watched 100 million ounce threshold. Um you've written about this before. How likely is it that we do get a scenario uh in which the Comx does not have enough silver to cover demand? In other words, a silver squeeze. Is this something that we should be watching for? >> I think it's something we should be uh slightly worried about, but at the same time, it's not something that I think will happen because ultimately we have to remember that Comx sets the rules and if they if if they need to change the rules in order to avoid it happening, then they will. Um what right now we are seeing open interest in the March contract coming down fairly fairly hard. It did it did slow down a bit on Friday. There was not a much that big a reduction in in in the March open interest and that does clearly needs to come down quite significantly in the next couple of weeks. But we also have to remember that the it is not on the actual first notice day that uh that we we look at it it the notice period last runs for a whole month. So there is there's quite a lot of time for for for these uh for the both long and shorts to be be reduced. So I'm not too too concerned that it will happen. But there's no doubt that with the kind of interest we see in the silver market and with the with the inventory levels or the deliverable uh stockpile as as low as it is then the mark will if if it's if it's no problem if there's no problem in March then the investors will look towards May and say well then maybe it might be May when when things uh when things happen. So we need to see inventory levels uh start to move up again. They have been moved to London in in recent weeks. Well, there's been a draw in the comx market into the London market which inadvertently has actually helped stabilize the market because liquidity is returning to the physical market and that's helping to bring some of the uh the the the lease rates and the the carry rates uh more under control but um it is something we need to watch but at this point in time I'm not I'm not too concerned. I think the open interest will continue to come down and come down fast in the coming days. Well, in your opinion, what was the major contributor to silver rising dramatically from $30 just uh $35 uh in September to $50 shortly after and then a straight line from $50 to $100 in the matter of two months. Um that may have some people say that that may have not been purely higher demand. It's not possible within a short amount of time if it's purely demand driven. It must have been a structural deficit or perhaps a major shortage somewhere that drove this up. What do you think? >> I think it was speculation about a major shortage that uh that basically collectively helped drive a lot of uh small investors into the market. uh um and and if you if you if if if there's enough buying at the same time in in even though it's smaller amount then it all adds up and and when you get this uh extreme amount of of buying in the call in in call options uh on some of the major major ETFs then then the move starts. I think actually when we moved up towards the $50 that at that that point we did see some buying from uh from industrialists uh industrial users simply because normally in normal markets if you the best cure for high price is a high price because it it lowers demand but this point the when we at the same time talking about the the potential deficit there could have been some some industrial demand simply because they felt they had to buy it in order to ensure that they didn't run out of silver for for the coming period. So I think that was part of the the initial phase of the the rally when we when we broke 50. But then uh but but then the acceleration we saw when we we moved above that was simply a market where liquidity was starting to to dry become uh dry out and that meaning it was it was a lot easier to uh to to push it at the same time. you really want and and at the same time I think there's also attempts to sell into it which then got stopped out and that's what we see when we have a bull market that quite a lot of the time quite a lot of the buying that takes it to new highs are shorts that need that got got it wrong and need to get back in or get out get out of their shorts. So it's just a combination of of many many different things. We are seeing the we are we still need to uh to see whether what the impact on the demand side will be but also the supply side because um so far this year the saw the sil institute recently uh come out with a forecast looking for a deficit of around 2 was it 20 I can't remember now >> two I can't remember the number but uh >> that's okay it was um >> it was when we look at that that obviously on on paper looks uh looks pretty uh looks like a high number, but we need to work out what kind of industrial uh demand destruction impact these higher prices will have. And I think it'll probably take time because first of all, industrial users will pass on the increases to the consumer. And if they start to say, well, we're not going to pay pay these levels, then eventually production is going to be negatively impacted. And that could slow lead to a slowdown in in industrial demand much more than than what we we seen we've seen here. >> I mean the second time. Yeah. Go on. >> Oh. Oh, sorry. I was going to say well look yes we we do know that the silver market has been in a deficit for quite some time according to the silver institute but the silver institute has been sorry has been publishing a deficit number for many years now. Uh, and what's taken people by surprise is the fact that this move happened this quickly, this suddenly. How would you explain that? >> Simply, well, I I have to call it a specul speculative frenzy. Um, because we're all seeing we're all seeing and hearing the same things. And then um and not not to um not to look uh look in in in in different directions but um there are some there has been we we've seen a bit of the the squeeze mentality and we saw on with Bitcoin as well in in in in the past 5 to 10 years where where groups basically they're all talking about some some elusive numbers that we can reach and obviously if someone if if you start thinking well the silver can go to a thousand and it's only trading at Asia of you want to be in get involved. And so with that in mind, I think it's it's very healthy that we're just seeing a bit of a reality check now on on prices and just see it stabilizes and and if we've moved high again from here, well then it does indicate that the underlying demand is still there and then it's it's justified. >> Well, can you make the argument that the deficit in supply demand um dynamics don't really matter all that much because like I said earlier, I've I've been noticing that they've published the Silver Institute has published a deficit number for many years already. this price has basically stayed flat up until last year and then all of a sudden due to a speculative frenzy like you said the price shot up. So it had nothing to do with the fact that all of a sudden it's been in a supply deficit. It's been a supply deficit for years already. Oolie. >> Yeah, it has. And and what what probably uh helped trigger the the focus on this the deficit was the was the shipments of silver to New York ahead of or the threat of tariffs announced. We saw that in copper last year and we also saw a lot of sh silver suddenly being shipped and that helped create this tightness in the London market last uh August or October I believe it was and that's really when it when it kicked off in earnest and that was the tightness in the physical market because silver was was being shipped to to New York or to the US ahead of a potential tariff announcement and that's really when when the the focus resurfaced and then then the speculative interest that basically takes over and China has mostly been a been a major part of this. You only have to look at some of the uh some of the funds traded offered to Chinese investors. There's one that is the only pure silver uh fund is is just a mind-blowing. It just uh on the Thursday before the uh the Friday collapse in in January, it traded a 50% premium uh to the underlying value of of the positions it held. So investors in China were prepared to pay 50% above the underlying value. That tells me that this is purely speculative because if you just sat down and actually looked at what it is you're buying, would you buy 50? Would you pay 50% above an underlying price to get involved hoping that someone else would pay 50% or higher even even higher tomorrow? that that that is the biggest sign that when you get into a frenzy where you have to be a bit careful and the result of this was that the uh that the plumbing in this uh fund broke and on a Friday the market was shut and then it was basically limit down four days in a row 10% every day meaning it was just sitting there you couldn't get out so um so we need to watch very closely what's what happens in in China silver inventories in Shanghai is is also being depleted at this point in time so so we need to see supply come into the market from somewhere. Whether that's coming from scrap, that remains to be seen. But now now I kind of I've remembered the number as well because I was just reading a Danish paper the weekend and there's a small um there's a Danish um shop basically taking buying and sell selling silver mostly buying it and they basically um said that they have taken on taken in between four and five tons of silver in in the last 3 months and if you look at the global deficit I believe it's 2,000 tons then if four or five tons has come in just in Denmark which is a country which is not known at all for its trading in precious metals and you and then you and you you scale that up to the to the global space then there will be scrap coming into the market in the next three to four months and then we have to get a at that point in time I would have a better idea or better view of whether this deficit is actually something we need to be concerned about. >> And so finally on silver before we move on and close off the conversation on silver you said that it may not rise as much as gold. You're more bullish on gold. So where does silver land for you end of the year? Um, we're at $76 now. >> Well, I think I I I prefer to look at silver as a as a relative uh play to gold. I mean, that I know that a lot of people don't want they they look it as an individual metal, but I think the if you if you look at the the last 20 30 years, silver, the gold silver ratio has average been averaging around 70. I know that if you are really bullish on silver, you look way further back than that where the ratio was was perhaps as low as low as 20. But let's just focus on the last 30 years. The ratio has been around 70. Uh we we we dropped down I believe as low as was it 45 or something recently. Now we're back into the 60s. So based on based on on on gold going back to say 6,000 within the next uh next year. Um then I could see silver stabilize perhaps in the in the $100 region. But uh I'm I'm I'm well as you can get from this there. I'm certainly not the $200 uh band that that that some are looking at. Um, so 100 I think is is potentially as far as we can get. >> Did you you've been in the industry for many years. Did you anticipate yourself saying the sentence, I anticipate silver stabilizing around $100 by 2026? >> No, not at all. Um, I traded my first silver 25 years ago. Yeah, probably nearly 30 years ago for a hedge fund in London. And uh, that was we traded uh, gold back then at what, $300 and silver at less than 10. So uh so what we have seen this year is is most certainly phenomenal and and um I think there's probably still some people that in the years from now the time they'll look back and say well wow look at that peak we had before the collapse. I don't think that I think times now are different. I think we can manage to to hold on to most of these gains but uh but we we need to see uh probably first of all some consolidation but yeah it is a it is a a phenomenal level that we've seen. Finally, on uh oil, the fact that it's been trending lower ever since 2022, uh down pretty much 50% from its 2022 highs. What does that signal to you about the economy? >> Well, it's probably single mo mostly the fact that the that production has managed to to keep up with with demand. Um demand has been rising. Uh we we haven't really had any any down years. uh maybe except the recession around the the brief recession around co times but the demand is is has been going up and continues to go up. So uh so what we've been we basically I would say we've been blessed with cheap oil and cheap energy because oil at in the 60s historically inflation adjusted everything it is such a cheap uh cheap source of energy and um and the question is really how long will that can that be maintained for now we have a situation where there's enough enough being produced not only from OPEC but also from nonopc um some worries just in the short term about geopolitical risks uh to supply but but generally the market is uh is is supplied has has got ample supply. But looking ahead, we still have to if if the projections are that in that demand will continue to rise perhaps at a slower pace than what we've seen in in in the last 5 to 10 years. But if demand continues to rise and we have um the lowhanging fruit has been has been picked. So basically there's going to be depletion rates in the order of 6 to 8 million barrels on an annual basis. We need a lot of investment to go into the energy market, energy market in in order to ensure we have that oil coming out of the ground. And I think current prices uh is simply not high enough because all these energy companies they they witnessed an experienced inflation as well, labor cost uh cost of metals, cost of their raw materials, everything has been going up. So we need higher prices over time in order to just in order to ensure that we have supplies. So uh so I think the 60s I think we should enjoy them, enjoy it while they last. Um, if we look to if we talk again a couple of years from now, I would imagine that we're seeing uh oil trading at least up into the 80s, perhaps in the '90s. >> How significant is the Middle East uh relative to oil? Trump, President Trump over the past weekend has been advocating for a regime change in Iran, which is a 180°ree change in stance. By the way, a couple months ago in 2025, he said he's not supporting any a regime change. Now, he is vocally advocating for it. uh the battle group carrier has already been pulled back so tensions are dying down a little bit. But if Iran falls to a different regime, does that play a role on the oil price? Oh, it does indeed. Uh absolutely. Um and and that's really what the that's really what what makes it very difficult to predict because uh one thing is uh wanting a regime change in in a far away country called Iran. Another thing is what that regime regime change would mean in the short term for consumers in the US. And I know it's it's um it's a bit cynical to look at the look at this way, but we are in a year where where there's a midterm election coming up. And and US voters are I'm sure they care more about uh domestic fuel prices than they care about what happens in Iran. So with that in mind, I I struggle to see any any action that could uh could cause a disruption uh from the Middle East. And but if that does happen, then uh we're not going to look at the at Brents the global benchmark trading below 70. Then we will spike above 70 for for a period of time because not only Iran supplies could be impacted also supplies from other uh states sending their crude through the straight of Hamus close to Iran. So so it the next couple weeks will be extremely interesting to um to to to watch. But I I just I just have to remain cynical at this point in time saying, well, it's not in the US interest to uh or at least in the president's interest to cause gasoline prices to to move higher. Also, we saw the CPI, the inflation print last week. One of the reasons why it was lower than expected was low energy prices. So, at least that's one one uh one box that can be ticked in in terms of what has been promised and and delivered. So uh risking that I think is something that uh there really has to be some very strong arguments within the administration to go ahead and and cause a disruption that causes higher prices. >> Okay. Excellent. Thank you very much Ole. We appreciate your thoughts. Uh let's uh end the discussion here and we'll follow up next time. Where can we follow your work? >> Well as as you mentioned I work at Saxa Bank in Copenagen. We are global online uh online bank. We have our websites where where we post everything. So that can be found on on uh on home.saxinsights. Otherwise um I post everything I do also on on X and on Substack. My X is uh Ollie Ole S Hansen with an E and that's where I post everything besides what I post on the on the Saxo websites. >> Okay, thank you very much. We'll put the links down below. So make sure to follow the Saxo website there. Appreciate you once more, Ole. Speak next time. Take care for now. >> Thank you very much. >> Thank you for watching. 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