GOLD Loves Trump: Wildest Year of My Career, What’s Coming? | Mike McGlone
Summary
Gold and Silver Rally: Gold is trading near all-time highs, driven by geopolitical tensions and central bank purchases, while silver has also seen significant gains but remains volatile.
Copper Market Concerns: The podcast discusses a potential copper supply disruption at the Grasberg mine, raising questions about copper's future as an economic indicator amid supply constraints.
Stock Market Volatility: The low volatility in the US stock market is highlighted as a concern, with potential for increased volatility in Q4, which could impact gold prices and other risk assets.
Central Bank Influence: Central bank gold purchases are a significant driver of the current gold market, with ETFs seeing inflows after years of outflows, indicating strong institutional interest.
Economic Indicators: The discussion emphasizes the importance of monitoring economic indicators like M2 money supply and GDP growth, with concerns about potential deflationary pressures from China.
Investment Strategies: The podcast suggests considering alternative investments like gold and Treasury bonds, given the high stock market valuations and potential for future corrections.
Precious Metals Outlook: The conversation covers the outlook for other metals like silver and platinum, noting their dependence on industrial demand and the broader economic environment.
Market Risks: The potential for a significant stock market correction is discussed, with gold potentially serving as a leading indicator of broader market trends.
Transcript
Gold is still trading near all-time high levels. Silver just recently touched at $45. But investors are looking the other way. They're looking at something else that is happening in in the commodities market. And that's copper. Massive supply disruption coming from a massive mine probably the second largest mine actually copper mine in the world, Grasberg. And we need to discuss what does that mean? Is that copper supply shortage already coming in 2025 or will it take a bit longer to sort of seep through the system? I've invited Mike McCull. He's a senior commodity strategist over at Bloomberg Intelligence onto the program to discuss that. We'll start with gold. We'll talk about the drivers behind this massive price rally, but uh second part of the conversation, we're definitely going to f focus on copper. What should we be paying attention to? What are some of the key levels and what is Mike's outlook for copper, of course. So, lot lots to discuss in a very short time. I really appreciate you hitting that like and subscribe button. It's a free way to support our channel and as I said, we appreciate it. Thank you so much for doing that. Now Mike, it is great to welcome you back on Soore Financially. Thanks so much for joining us. >> Oh, thanks for having me back on. Kai, enjoy speaking to you. >> Yeah, really looking forward to the next 30 minutes here with you, Mike, as well. Um, as I mentioned in the intro, we have quite a bit quite a few topics to get through here. Um, let's start with gold. Gold and silver, um, in particular, massive price rally. We're we're trading around $3,800 in the futures. Uh, silver around $45 in the futures market. Um, in insane price move. Let's simply simply put what's driving gold? What's driving silver? >> Um the most significant thing for gold is geopolitical um nuances that are kind of tilting negative. We see what's happening in Russia and some of the wars. I think the most important thing for gold is President Trump. I mean, gold just loves his president pushing back on the Fed and the tariffs and, you know, kind of discombobulated lighting a lot of things that made America um equity prices very expensive. And to me, that's another thing that gold's figuring out is as we head towards the end of September, we're recording on September 25th. 60-day volatility on the US S&P 500 is the lowest in five years, 2020. So, it only has room to go up. So I think gold's starting to sniff out the the nuances of that. And one thing that's I really notice about go first of all key supports 3500. That was resistance. Now to me that's support and very good resistance is 4,000. So I think gold's locked in the very narrow range. I don't see really what it makes stay below 3500. Can easily re revert there. I don't think what see what really makes it stay above 4,000 in near-term unless the stock market goes down. But it's the bottom line macro that really matters. It's the best year for gold since 1979. To put that in context. 1979 inflation was run in this country was running 10% um and we had the Iranian revolution um and gold was acting accordingly but I think what's happening is gold is basically expensive versus almost all assets most notably metals and commodities and it's cheap versus one main barometer or measure and that's beta the S&P 500 and it's starting the stock market starting to go down versus gold to me it might be front running a little bit of normalization But overall the thing is it's pulling up the rest of the precious metals. So I'll tilt over to them a little bit. Now first on one thing I want to finish in gold like I am on a radar for looking it's on my radar for looking for overbought signals in gold. So the key thing you start with is those leverage futures. That's where I come from a background. And to putting that in context there's not really nowhere near as overextend as they were last year. Leverage futures positions i.e. manage money people call them hedge funds are running about equivalent about 16 to 17 million ounces. That's down from last year's peak around 20 almost 26 million ounces of net longs. You know, these are can they get stopped out in a heartbeat. The thing that's really kicking in is ETF flows. Significant flows in ETFs after four years of outflow. So, that's the big flip. But the bottom line, central banks are buying. Most people have seen the statistic that now central bank gold reserves are surpassing um other many other things potentially the dollar. And the question is what stops that? I'm still quite bullish. The key thing I wanted to tilt over is mentioning silver, platinum, and platium. It's pulling up all those other metals. They're basically subject to beta in the space. Beta is gold in the space, particularly when we have a world that's kind of seen more focused on downgrades of GDP growth versus upgrades. You know, facing those tariffs. So, silver to me is still on a decent bullish track. But remember, it trades two times the volatility of gold. And it's up the same as gold in the last couple years. this one year alone, it's up 40%. Gold's up 40%. But that's not good for silver when you take double the risk and they have the same return. But I'm still bullish. But to me, that's part of that tilt towards um uh it's gold is becoming the safe haven and maybe it's front running a potential backup in US stock market. >> Interesting comments. Couple follow-up questions. Maybe one of the simplest one to follow up on is is central bank buying and uh the reaction to news. It's always interesting and I've observed it last week before the Fed meeting. gold remained flat, even dipped a little bit. The stocks dipped as well as people were taking gains off the table, but you're saying central banks are the main driver like they're they're not really I would assume they're day traders when it comes to um trading gold to bullion. So, it's like I'm trying to find out that correlation there, Mike. Um how that works. >> So, that that's actually hard much harder to measure. I mean much there's people a lot smarter, better data than I who do that. I w I watch the stuff in the world gold council but it's the only other thing that really makes sense because um like you're not seeing in leverage futures which would been a signal if we can see leverage futures get way overbought right now they're about 33% of total gold comx open interest are managed money net longs and last year's high it was closer to 45% so they way pulled off so they're not overextended obviously they're long but but not way overextended long ETFs are big part of it but if you look at ETF flows overlaid with gold for since 2008 typically those that the the the rate of change in ETF flows led the price of gold. Now they're lagging. So gold's taking off and it's because the deepest pockets on the planet are still buying and for good reason. Um wars going on, the nuances of Mr. Trump. Um and I just view it as a pretty good bull market. But no, right now I I view it as very much stuck. I'm very concerned about the scary signs you're getting from gold. Gold rallying at this velocity and virtually all risk assets going down versus gold is not a good sign. So we're as we enter towards enter the fourth quarter this year, I'm very concerned that what's very low stock market volatility in the US and what are very high elevated stock market prices might revert a little bit and legitimize this front running potentially leading indicator gold in this space. What's the opposite side of that? Say the stock market stays on a tear and volatility stays low. That might see some pressure into gold maybe towards 3500. I'm expecting more the former stock market volatility to pick up and that's the key thing kind as we head towards fourth quarter. If we get a pick up in volatility in Q4 that will trickle over to next year and might last three years. We're so overdue for that and that's the key thing I'd like to end with is what do you have a stock market cap to GDP that's 2.3 times which is basically what it is in this country basically around there. It's the highest in a hundred years. We have stock market cap versus the rest of the world stock market prices versus the rest of the world at about the highest ever. almost twothirds of global stock market capitalization which is quite high then it is um you have to certainly for astute investors you look for alternatives now we're seeing that in the dollar I think a lot of astute investors are selling out US assets and looking for alternatives gold's the top um and what ends it so I'm just worried about the fourth quarter might give us some major signals that could endure for years particularly if stock market goes down versus me same old stock market keeps going up and volatility stays low and that would make less sense in an environment like this with gold up 42% on the year >> like my mind went to the M2 money supply when you were chatting Mike and trying to figure out the correlation here because a lot of liquidity needs a home and seems like the S&P 500 is that home because it provides that liquidity. Um but M2 money supply keeps going up. Um what what are you looking for when it comes to like a correction in the main markets in terms of shock indicators? Like what could that trend reversal trigger? We've seen like the tariff, you know, liberation day back in April and we've talked since then um about that before, but what are some of those indicators you're looking for? And I keep coming back to liquidity here. >> Everything is dependent. And now the key thing about M2 money supply, it's it's running around 22 um trillion depending on how you look at it, which is not much up from the peak in 2022. It had that big spike and then it it flatlined for a while. But the key thing to remember about every indication now on the planet, every economic data, every piece of money supply, certainly the data that we came out today on September 25th, which showed GDP strong and employment doing fine are so much subject. First of all, we have we have to be sub subject now as after President Trump fired the BLS, Bureau of Labor Statistics head after he didn't like the data. That means everybody else has got to be very careful putting out a data he doesn't like. Not only that they're subject but most important thing on a scale of one to 10. The 10 is where the US stock market is its relative value and it's going up or down. And the key thing I want to point out is if it drops 20%. Or rallies 20%. That's 14 to 15 trillion dollars. That's 50% of GDP almost 50% of GDP. That is matters more than anything right now. And that's why I keep saying it's got to keep going up. The signs are it's getting very very extended. Volatility is the lowest in five years. It's not a place you want to overweight. So I look at money supply and everything like that is running up on the back of this massive wealth creation machine and it will all matter when we see some reverence. So let's talk about what's really happening in the most significant the second largest economy in the world. We see severe money supply growth. Now I mentioned US is around 22 trillion. Money supply growth in China is running 45 trillion based on some measures. I tried in chat P GPT and it said double that. It said more than it said over 60 trillion. So, I'm sticking with the numbers I see in the terminal. The bottom line is it's running rapidly high, running two times US um um money supply growth. Um and they're running their deficit. The GDP is around 300%. Now, the US it's about 130%. Some other countries in Europe are a little bit higher, but that's massive fiscal monetary pumping. Yet, the tenure note deal in China is 1.89%. I said one, that's 1.89% 8 9% well below 4.17% in the US and PPI is running almost minus almost 3%. What you're seeing is severe deflationary forces on the back of this big pumping in liquidity and money supply. That's what happens in deflationary environments. The government's reacting to this overwhelming deflation most notably from property market and just from an emerging market that grew too fast. So that's the risk. I think that's what gold is pricing in is that factor from China potentially tricking down into places like Europe. You see every all the auto makers are having problems. Germans potentially tilting towards recession. This has been a while and potentially the US and the whole world is being held by one final pillar that's the US stock market. So I have to put things in context I think really matters and add by the time this hits the tape I will have published my um metals outlook for the month of October. And I'm just pointing out is it wrong or bad? And by wrong I mean we'll get to in a second but copper is having some supply disruptions that might be going up for the wrong reasons as an economic indicator and gold is clearly shown as bad economic signs. um inflation or deflation I think it's much more the deflation that follows inflation the risk of that and that's why I point out is the stock market in US haps has abso absolutely has to keep go going up which to me the risk goes down and has a little bit of reversion just a modest pick up in volatility um gets the VIX to where around 20 that's normal that's nothing the average history is 19 right now as we speak at 16 the low for volatility VIX was in August around 14 that's the same time that Bitcoin put in its tie. You see the event there? We see these pump up in risk assets when volatility is low and then risks is volatility picks up and the risk assets go down and I think gold is front running that. No, it's it's it's interesting like maybe just a follow-up question to to the stock market itself or maybe question SL statement, but I heard I picked up somewhere the US needs the stock market to do well because that's the retirement fund for the for the American people and it's it can't be replaced. Would you agree with that? And is that one of the reasons it just cannot go down? >> Well, that's why it will and that's why the risks are it's going to. It's a question of when and then what the government does to support it. Absolutely. It's again it's 2.3 times GDP. The US average US person average person on the planet is the most exposed to the US stock market than any time in history. The only time that we got close in terms of GDP in this country was 1929. It got to a little bit over two times GDP. Um, and the only other recent relevant example in history was Japan in 1989. Now, some of your viewers have heard me say this before. I started in the business in 1988 working at the night session, the Chicago Board of Trade covering Japanese clients. So, I guess it's somewhat ingrained in me. But we all learned what happened. Deflation follows inflation. You got to keep it propped up. And I that's why I'm sticking bullish gold. And I'm very worried about anything else that is an risk asset associated commodity. And you mentioned gold. Bitcoin is like the digital version. It's very expensive, but it's much more of a risk-on asset. Gold's more riskoff. And then there's things like good old Treasury bonds. One thing that's been happening this year is bond yields have been declining. So it's not at least certainly in the US. So, it's not really an inflation issue. It's deflation potential. >> Maybe one last question on gold before we move on. You touched on copper already. Um, Fed rate cuts like what is the impact? What what is gold pricing in there as well? I haven't heard you mention it really. Um, but uh I I mentioned it to you. It seems like the gold market is very what reactionary to what the Fed does uh to a degree or ant it anticipates and then it reacts. So curious what is priced in there, Mike. >> Well, there you go. So, let's talk about what's priced in. Um, when the Fed cut rates on September 17th, a year from now, Fed fund futures were priced to be at 3%. Continue going down. Now, right now, they're around 4%, a little bit above if you use the average price. So, expecting that's priced in the market. A year from now, after they have cut rates, since they've cut rates, that expectation for September of 2026 is now about 3.2%. So it's gone up meaning because the stock market is doing great creates more inflation and it might be perceived that was a political cut. Um which is a problem. Um also bond yields have ticked up a little bit. The same thing that the same same things that happened the last time they started cutting rates in last year is showing up. This probably not a good idea if they're cutting rates that yields are going up. I mean bond yields because that's the goals. Get mortgage rates down. It's telling the Fed, sorry, but I'm glad you've turned political. Hopefully you didn't. But this is a problem. No, they only caught 25. It's not a big deal. It's a good trial error and insurance policy as Mr. um Paul said that's fine. 25 is not Yeah, exactly. There you go. Thanks for the right proper quote. It's not going to matter in future. But I like to point out um let's put some facts to those people who think when the Fed's cutting rates that's good for the stock market. 19 um 2001 the first rate cut came of that cycle in January, second or first first business day of the year. And after that the S&P 500 dropped 45% in to its low in 2022 as we killed towards recession. September 2007 the Fed started cutting 50 basis points. Then stock market put in a high a few days later and then dropped 55% to its low in 2008. Um, so the facts are if we're restarting a easing cycle, the Fed could be behind the the inevitability of US employment going up, stock market going down, and throw in there the nuances of the Trump administration, these extraordinary tariffs pushing back on the Federal Reserve. And there's a lot of little inclaims here to say, well, maybe we just go back to a normal one to one stock market cap to GDP. And I stick with my base case. I started this year and I've been wrong so far. I think we're at the beginning of this the third 50% correction US stock market this um since 2000. It's not a big profound thing to say that we've already had two and it hasn't shown any signs of that yet. That's why I think fourth quarter is everything. But the key indicator that might be right is gold. Gold just keeps taking off. So that's my macro on the big picture there. And um and that's where copper is not kind of it's not it's not fitting in well taking doing what it's doing. But it's it's rallying out recently for the wrong reasons. cuts from, you know, supply disruptions from some mining operations as you mentioned Freeport Macarona. I >> I I still have one quick question about silver actually before we get to copper. Um I got I got to jump in here real quick on silver. Um why is it not able to break out versus gold? Because usually outperforms gold 2:1, 3:1 as you said like the risk, the volatility is 2 to1 as well. Why is it not managing to break out? Is it really just the industrial side holding it back? >> I think so. I think it fits into my macro view that the world's tilting towards a recession. And I pointed out this fact was what's happening in China. China's exporting this deflation to the rest of the world. Why? Because it has to. Now the US is not importing those lot of those cheap goods. Um and um it's a paradigm shift that's way overdue. So questions will change. I think for silver to catch up to gold, you need a pretty significant demand pool shift from the rest of the world, which is all tilting the wrong way right now, facing these US tariffs that are just getting started. Um, but I'm still bullish silver. But let's al look at what's happening with the silver gold ratio this year. This peak was in April around 105. Now that's extraordinarily high. Um, and the range is right now it's down about 83. So when it peaked, it got above 105. That was a pretty good signal to buy silver. It was just too damn cheap versus gold. What happened at the same about the same time is platinum made an all-time new low versus gold and it's popped up since. just, you know, all these other um precious metals are subject to beta when it's going are catching up, but they're all industrial. And now the silver to gold ratio is around 83. The bottom, the base for that silver to gold ratio is basically been between 80 and 105 or so for a couple years. It's nearly lower in the range and it's probably point in time you're supposed to be looking at going back to overweight gold. But the point is if you have a one to one position silver versus gold, you have double the risk you're getting same return. Silver is trades two times the volatility of gold. It rallying at the same velocity of gold is a real bad sign. Now it's going up. That's great. I like to watch one key thing I used to be work at a firm that manages this position, Glitter, Gl. It's a basket of precious metals on the year. It's up 45%. It's up more than gold, trades lower volatility. uh you know I have to been in the business for decades and I've always viewed that as a great way to be exposed to precious metals because you don't have to figure out the nuances between them as an investor but I do expect that gold to continue to rally and particularly as I point out to say to be able to say that 60-day volatility on the S&P 500 right now is the lowest in five years means you're probably better off in gold than any other um of the more high beta high gamma high beta precious metals. At some point when that reverts and and I didn't say if then it might revert back but I'm really concerned now the lower end lower end range of gold versus silver I expect that 83 level it might get down on the 80 to pop back towards 100 in the gold silver ratio. >> I've never heard of glitter that just the ticker alone is intriguing enough. I'll definitely do my homework on that gltr. I pulled it up here. >> Well so you know I'm not you know I'm supporting I don't pump any products. I don't do that. I just know that one cuz I invested in it 10 years ago because I worked for that company ETF securities. I did it. I part of the reason I joined the company because I really enjoyed I really like that way to get involved in precious metals basket. >> You know, it's trying to pick pick out the winners is tough. >> It's just the name reminds me of a meme stock. That's why um I guess >> but it tracks it tracks the physicals. I mean it's that's the key thing. It it's it's it's up this year like a meme stock with a fraction of the volatility. It has an underlying base of gold, silver, platinum, and platium. Obviously, you can tell I used to be quite involved in it. And I say, well, I stick with that one. It's 50% gold and the and the the others are the rest of it. So, >> no. No. Interesting. I'll take I'll take a closer look at I wasn't aware of it. So, just the ticker itself already intrigued me. Um, but Mike, we we have to move. We have to talk copper. Like a big big supply disruption that just happened a few days ago. Unfortunately, there was a uh there was a force majour accident at the Grassburg mine operated by free Freeport McMaran in Indonesia. Um runs a bit through your copper thesis like how has that changed the overall thesis? You already hinted that uh copper might lose its appeal as an economic indicator due to those disruptions. Um what do you make of it? So first of all the key thing about under disruptions and the fundamentals is my colleagues in London most notably led led by my colleague Grant Spora points out it's pretty much in a deficit now he thinks 10,000 is moved to from resistance to support and it's going to continue up and the key thing I like to point out is these disruptions are temporary and almost always temporary they almost give you a spike that's a spike to sell and unless it's in a in a de a demanddriven bull market typically That's not what you want for copper. You want supply spike. Bull markets are definitely typically not enduring. Let's look what happened to some other less more elastic commodities to the peaks in 2022. And that's crude oil and grains are still in downward trajectories because of those spikes in prices. So I'm very concerned copper um I like to use it use the US dollar price copper this year because it's much more relevant this year because of what's happened in tariffs. It's pushing up near near five. I think the risks are it goes lower particularly like I said the 10 in the room now I think for copper economic senses metal is US stock market it'll be fine copper has been fine it'll keep going up as long as new US stock market keeps going up it's up about the same as the stock market this year it's 18% that's great so let's say the stock market gives back 5% of that to me that's a major pressure factor because copper's bumped up and can supply constraints but if it goes down because that demand's going down it'll make it worse and so here's the key thing I like to put copper in the same bucket as Bitcoin it has to go up or else all indications are upward. 100 day week, 50 week, 200 day, all the moving averages are higher. It gets to those dips, you're supposed to buy, everybody's on board. Everybody's bullish. What's the risk? The optionality is it goes down. And that's why I point out this. That's why the US stock market has to go up because they all in the same trade right now. When you get volatile markets, correlations are so tight. Everything's so completely dependent on US stock market. Maybe more so than in any time in history. I put all risk assets in the same bucket. So my headline I just published today might be time to be looking at positive gamma negative delta options positions. They might have an advantage in Q4 particularly when you see fixed volatility index. You know it's still at 16% bearing but overall actual realized volatility in the stock market the lowest in 20 years on a two-month basis. It's not the time to be get excited about things like copper popping. So, I think the risks are um it might bring out the sellers. And that's why I think Q4 is going to be everything. And if things start tilting lower, I think it's going to accelerate downward. And what's the best leading indicator for all this? Cryptos, Bitcoin. They're the most speculative. Um and the key thing, I'll end with one thing about copper. I I like to keep a close eye on manage money net positions. They are running right now on 20% of total um open open interest, which is the highest in a year or so. So, specs are on board. That's great. which means they could be the first sell stops if um we have start having cracks in the arm. And also one key thing I want to end with copper right now the dollar price is 476 or 475 $4.75% 75 the highest um year-end close ever year end as we approach year end was 446 in 2010 and 2021. Can we end the year um with this economic sense of metal sense of metal at an all-time high and to me the risks risks are downward? Yes. This recent pump has kind of thrown me on the mat a little bit, but that's part of being a strategist. Sometimes you get stopped out and you reset. So, we'll see how a couple months from now, see if it can keep it up. We'll see if stock market US stock market volatility can stay low. My thought is risks are volatility will pick up and um copper will be one of the first to suffer. >> The 3% of supply disruption like it is massive. It is it is a big big hit to the market. Of course, the question is like how quickly will that be absorbed? Um, we we've been talking about or the market and coming from the mining side, we've we've been talking about a copper shortage due to EV, AI and and many more factors of course here. Like isn't that pushing it even further into that regard? Like should we be taking maybe copper out of context that you've described like the known framework and maybe look at it a bit different almost like a critical metal? >> Well, okay. When you say EV, my first thought is silver. The most electrically conductive best conductor electricity is silver and it's underperforming gold. Copper is underperforming gold. So why is gold beating them all? Because geopoliticals are more important and that's the thing that's happening is is deflationary. When you mention any type of industrial metal start with China and what did I point out earlier? Deflationary forces in China are significant and they're completely dependent on exporting and that's getting pushed back and the whole world's dependent on US stock market staying elevated. You see the the tilt there? That to me is why gold's beating it. And that's the problem I have with when gold beats copper. It's the highest ever right now. I think it was 780 pounds of copper per one um I'm sorry, pounds of copper per one ounce of gold as we speak. We've never ended the year above like 600. The signs are bad if you look at gold. So they're all rallying as great and I'm worried about um just a little bit of reversion US stock market. We're going to see the see who's wearing clothes. And I suspect the industrial metals um and s they're all industrial metals versus gold these days will have a problem. But again, this is wonderful as we speak. Stock market's great. It's up. I'm just showing the kinks in the armor and the potential for fourth quarter to give us here's one thing. Here's one thing I I will end with I've been looking for for Wells to expect the VIX which has been an upward trajectory in a 200 day moving average certainly since President Trump was elected or well before that when he was elected was 15 or so the 200 day moving average now it's around 19 to expect the VIX not to pop to near 20 um and expect Bitcoin not to back down to near 100,000 before the end of the year I think is unlikely. know those are the key points. You're supposed to sell the first move up around 20 in the VIX. We probably get it. It's just finding the reason you're supposed to probably buy the dip near 100 in Bitcoin. Probably get a reason. Reason I mentioned those are some of the best indicators for everything else. It's if it's after that if we start trickling down below 100,000, copper and everything else will fall with Bitcoin. If we start keeping the VIX above 20, everything goes down. Um gold might even have a problem and that leans things over to deflation and Treasury bonds. Now, that's an hypothetical scenario. I'm potentially we'll see some inklings of in fourth quarter is a question of how much it lasts. >> Fantastic, Mike. Amazing insights. I love your correlations. Um, it makes a whole lot of sense. I can easily follow your your line of thinking where you're coming from. Um, it makes makes a lot of sense to me. Where where can we send our audience to follow more of your work, Mike? >> On your show. Thanks for having me. That's one thing I have to admit is so what I do is um I spend a lot of time doing research and once in a while I get to play show and tell with people like you and I personally appreciate that Kai. So thanks for having me on and to your listeners and visitors who are actually doers. I'm just a seriate you listening. I'm on X first terminal and I post a lot of my stuff on X at Mike Mcloone 111 and LinkedIn Mike Mcloone senior commodity strategist and if people are interested I'm happy to add him to my distribution list. um can just reach out via email. >> Fantastic. Mike, really appreciate your insights. Thanks so much for coming back on. We'll have to catch up soon. There was one bonus question I want to ask you, but we didn't fit in his oil because it has massive impact for the miners as well that we track quite closely here. We'll get to that. >> So, >> the trend's down. We don't have to focus on trend is down in oil. >> Yeah. Fantastic. Awesome. Which is good because margins are expanding for the miners. Fantastic. Awesome. Mike, thank you so much. Everybody else, thank you so much for tuning in. I hope you enjoyed the insights shared by Mike McClone here. He's the senior commodity strategist over at Bloomberg Intelligence. I tremendously enjoy our conversations and if you did so as well, please hit that like and subscribe button. It helps us out tremendously bringing guests like Mike onto the program. Thanks so much for tuning in and uh enjoy the rest of the weekend. Thank you. [Music]
GOLD Loves Trump: Wildest Year of My Career, What’s Coming? | Mike McGlone
Summary
Transcript
Gold is still trading near all-time high levels. Silver just recently touched at $45. But investors are looking the other way. They're looking at something else that is happening in in the commodities market. And that's copper. Massive supply disruption coming from a massive mine probably the second largest mine actually copper mine in the world, Grasberg. And we need to discuss what does that mean? Is that copper supply shortage already coming in 2025 or will it take a bit longer to sort of seep through the system? I've invited Mike McCull. He's a senior commodity strategist over at Bloomberg Intelligence onto the program to discuss that. We'll start with gold. We'll talk about the drivers behind this massive price rally, but uh second part of the conversation, we're definitely going to f focus on copper. What should we be paying attention to? What are some of the key levels and what is Mike's outlook for copper, of course. So, lot lots to discuss in a very short time. I really appreciate you hitting that like and subscribe button. It's a free way to support our channel and as I said, we appreciate it. Thank you so much for doing that. Now Mike, it is great to welcome you back on Soore Financially. Thanks so much for joining us. >> Oh, thanks for having me back on. Kai, enjoy speaking to you. >> Yeah, really looking forward to the next 30 minutes here with you, Mike, as well. Um, as I mentioned in the intro, we have quite a bit quite a few topics to get through here. Um, let's start with gold. Gold and silver, um, in particular, massive price rally. We're we're trading around $3,800 in the futures. Uh, silver around $45 in the futures market. Um, in insane price move. Let's simply simply put what's driving gold? What's driving silver? >> Um the most significant thing for gold is geopolitical um nuances that are kind of tilting negative. We see what's happening in Russia and some of the wars. I think the most important thing for gold is President Trump. I mean, gold just loves his president pushing back on the Fed and the tariffs and, you know, kind of discombobulated lighting a lot of things that made America um equity prices very expensive. And to me, that's another thing that gold's figuring out is as we head towards the end of September, we're recording on September 25th. 60-day volatility on the US S&P 500 is the lowest in five years, 2020. So, it only has room to go up. So I think gold's starting to sniff out the the nuances of that. And one thing that's I really notice about go first of all key supports 3500. That was resistance. Now to me that's support and very good resistance is 4,000. So I think gold's locked in the very narrow range. I don't see really what it makes stay below 3500. Can easily re revert there. I don't think what see what really makes it stay above 4,000 in near-term unless the stock market goes down. But it's the bottom line macro that really matters. It's the best year for gold since 1979. To put that in context. 1979 inflation was run in this country was running 10% um and we had the Iranian revolution um and gold was acting accordingly but I think what's happening is gold is basically expensive versus almost all assets most notably metals and commodities and it's cheap versus one main barometer or measure and that's beta the S&P 500 and it's starting the stock market starting to go down versus gold to me it might be front running a little bit of normalization But overall the thing is it's pulling up the rest of the precious metals. So I'll tilt over to them a little bit. Now first on one thing I want to finish in gold like I am on a radar for looking it's on my radar for looking for overbought signals in gold. So the key thing you start with is those leverage futures. That's where I come from a background. And to putting that in context there's not really nowhere near as overextend as they were last year. Leverage futures positions i.e. manage money people call them hedge funds are running about equivalent about 16 to 17 million ounces. That's down from last year's peak around 20 almost 26 million ounces of net longs. You know, these are can they get stopped out in a heartbeat. The thing that's really kicking in is ETF flows. Significant flows in ETFs after four years of outflow. So, that's the big flip. But the bottom line, central banks are buying. Most people have seen the statistic that now central bank gold reserves are surpassing um other many other things potentially the dollar. And the question is what stops that? I'm still quite bullish. The key thing I wanted to tilt over is mentioning silver, platinum, and platium. It's pulling up all those other metals. They're basically subject to beta in the space. Beta is gold in the space, particularly when we have a world that's kind of seen more focused on downgrades of GDP growth versus upgrades. You know, facing those tariffs. So, silver to me is still on a decent bullish track. But remember, it trades two times the volatility of gold. And it's up the same as gold in the last couple years. this one year alone, it's up 40%. Gold's up 40%. But that's not good for silver when you take double the risk and they have the same return. But I'm still bullish. But to me, that's part of that tilt towards um uh it's gold is becoming the safe haven and maybe it's front running a potential backup in US stock market. >> Interesting comments. Couple follow-up questions. Maybe one of the simplest one to follow up on is is central bank buying and uh the reaction to news. It's always interesting and I've observed it last week before the Fed meeting. gold remained flat, even dipped a little bit. The stocks dipped as well as people were taking gains off the table, but you're saying central banks are the main driver like they're they're not really I would assume they're day traders when it comes to um trading gold to bullion. So, it's like I'm trying to find out that correlation there, Mike. Um how that works. >> So, that that's actually hard much harder to measure. I mean much there's people a lot smarter, better data than I who do that. I w I watch the stuff in the world gold council but it's the only other thing that really makes sense because um like you're not seeing in leverage futures which would been a signal if we can see leverage futures get way overbought right now they're about 33% of total gold comx open interest are managed money net longs and last year's high it was closer to 45% so they way pulled off so they're not overextended obviously they're long but but not way overextended long ETFs are big part of it but if you look at ETF flows overlaid with gold for since 2008 typically those that the the the rate of change in ETF flows led the price of gold. Now they're lagging. So gold's taking off and it's because the deepest pockets on the planet are still buying and for good reason. Um wars going on, the nuances of Mr. Trump. Um and I just view it as a pretty good bull market. But no, right now I I view it as very much stuck. I'm very concerned about the scary signs you're getting from gold. Gold rallying at this velocity and virtually all risk assets going down versus gold is not a good sign. So we're as we enter towards enter the fourth quarter this year, I'm very concerned that what's very low stock market volatility in the US and what are very high elevated stock market prices might revert a little bit and legitimize this front running potentially leading indicator gold in this space. What's the opposite side of that? Say the stock market stays on a tear and volatility stays low. That might see some pressure into gold maybe towards 3500. I'm expecting more the former stock market volatility to pick up and that's the key thing kind as we head towards fourth quarter. If we get a pick up in volatility in Q4 that will trickle over to next year and might last three years. We're so overdue for that and that's the key thing I'd like to end with is what do you have a stock market cap to GDP that's 2.3 times which is basically what it is in this country basically around there. It's the highest in a hundred years. We have stock market cap versus the rest of the world stock market prices versus the rest of the world at about the highest ever. almost twothirds of global stock market capitalization which is quite high then it is um you have to certainly for astute investors you look for alternatives now we're seeing that in the dollar I think a lot of astute investors are selling out US assets and looking for alternatives gold's the top um and what ends it so I'm just worried about the fourth quarter might give us some major signals that could endure for years particularly if stock market goes down versus me same old stock market keeps going up and volatility stays low and that would make less sense in an environment like this with gold up 42% on the year >> like my mind went to the M2 money supply when you were chatting Mike and trying to figure out the correlation here because a lot of liquidity needs a home and seems like the S&P 500 is that home because it provides that liquidity. Um but M2 money supply keeps going up. Um what what are you looking for when it comes to like a correction in the main markets in terms of shock indicators? Like what could that trend reversal trigger? We've seen like the tariff, you know, liberation day back in April and we've talked since then um about that before, but what are some of those indicators you're looking for? And I keep coming back to liquidity here. >> Everything is dependent. And now the key thing about M2 money supply, it's it's running around 22 um trillion depending on how you look at it, which is not much up from the peak in 2022. It had that big spike and then it it flatlined for a while. But the key thing to remember about every indication now on the planet, every economic data, every piece of money supply, certainly the data that we came out today on September 25th, which showed GDP strong and employment doing fine are so much subject. First of all, we have we have to be sub subject now as after President Trump fired the BLS, Bureau of Labor Statistics head after he didn't like the data. That means everybody else has got to be very careful putting out a data he doesn't like. Not only that they're subject but most important thing on a scale of one to 10. The 10 is where the US stock market is its relative value and it's going up or down. And the key thing I want to point out is if it drops 20%. Or rallies 20%. That's 14 to 15 trillion dollars. That's 50% of GDP almost 50% of GDP. That is matters more than anything right now. And that's why I keep saying it's got to keep going up. The signs are it's getting very very extended. Volatility is the lowest in five years. It's not a place you want to overweight. So I look at money supply and everything like that is running up on the back of this massive wealth creation machine and it will all matter when we see some reverence. So let's talk about what's really happening in the most significant the second largest economy in the world. We see severe money supply growth. Now I mentioned US is around 22 trillion. Money supply growth in China is running 45 trillion based on some measures. I tried in chat P GPT and it said double that. It said more than it said over 60 trillion. So, I'm sticking with the numbers I see in the terminal. The bottom line is it's running rapidly high, running two times US um um money supply growth. Um and they're running their deficit. The GDP is around 300%. Now, the US it's about 130%. Some other countries in Europe are a little bit higher, but that's massive fiscal monetary pumping. Yet, the tenure note deal in China is 1.89%. I said one, that's 1.89% 8 9% well below 4.17% in the US and PPI is running almost minus almost 3%. What you're seeing is severe deflationary forces on the back of this big pumping in liquidity and money supply. That's what happens in deflationary environments. The government's reacting to this overwhelming deflation most notably from property market and just from an emerging market that grew too fast. So that's the risk. I think that's what gold is pricing in is that factor from China potentially tricking down into places like Europe. You see every all the auto makers are having problems. Germans potentially tilting towards recession. This has been a while and potentially the US and the whole world is being held by one final pillar that's the US stock market. So I have to put things in context I think really matters and add by the time this hits the tape I will have published my um metals outlook for the month of October. And I'm just pointing out is it wrong or bad? And by wrong I mean we'll get to in a second but copper is having some supply disruptions that might be going up for the wrong reasons as an economic indicator and gold is clearly shown as bad economic signs. um inflation or deflation I think it's much more the deflation that follows inflation the risk of that and that's why I point out is the stock market in US haps has abso absolutely has to keep go going up which to me the risk goes down and has a little bit of reversion just a modest pick up in volatility um gets the VIX to where around 20 that's normal that's nothing the average history is 19 right now as we speak at 16 the low for volatility VIX was in August around 14 that's the same time that Bitcoin put in its tie. You see the event there? We see these pump up in risk assets when volatility is low and then risks is volatility picks up and the risk assets go down and I think gold is front running that. No, it's it's it's interesting like maybe just a follow-up question to to the stock market itself or maybe question SL statement, but I heard I picked up somewhere the US needs the stock market to do well because that's the retirement fund for the for the American people and it's it can't be replaced. Would you agree with that? And is that one of the reasons it just cannot go down? >> Well, that's why it will and that's why the risks are it's going to. It's a question of when and then what the government does to support it. Absolutely. It's again it's 2.3 times GDP. The US average US person average person on the planet is the most exposed to the US stock market than any time in history. The only time that we got close in terms of GDP in this country was 1929. It got to a little bit over two times GDP. Um, and the only other recent relevant example in history was Japan in 1989. Now, some of your viewers have heard me say this before. I started in the business in 1988 working at the night session, the Chicago Board of Trade covering Japanese clients. So, I guess it's somewhat ingrained in me. But we all learned what happened. Deflation follows inflation. You got to keep it propped up. And I that's why I'm sticking bullish gold. And I'm very worried about anything else that is an risk asset associated commodity. And you mentioned gold. Bitcoin is like the digital version. It's very expensive, but it's much more of a risk-on asset. Gold's more riskoff. And then there's things like good old Treasury bonds. One thing that's been happening this year is bond yields have been declining. So it's not at least certainly in the US. So, it's not really an inflation issue. It's deflation potential. >> Maybe one last question on gold before we move on. You touched on copper already. Um, Fed rate cuts like what is the impact? What what is gold pricing in there as well? I haven't heard you mention it really. Um, but uh I I mentioned it to you. It seems like the gold market is very what reactionary to what the Fed does uh to a degree or ant it anticipates and then it reacts. So curious what is priced in there, Mike. >> Well, there you go. So, let's talk about what's priced in. Um, when the Fed cut rates on September 17th, a year from now, Fed fund futures were priced to be at 3%. Continue going down. Now, right now, they're around 4%, a little bit above if you use the average price. So, expecting that's priced in the market. A year from now, after they have cut rates, since they've cut rates, that expectation for September of 2026 is now about 3.2%. So it's gone up meaning because the stock market is doing great creates more inflation and it might be perceived that was a political cut. Um which is a problem. Um also bond yields have ticked up a little bit. The same thing that the same same things that happened the last time they started cutting rates in last year is showing up. This probably not a good idea if they're cutting rates that yields are going up. I mean bond yields because that's the goals. Get mortgage rates down. It's telling the Fed, sorry, but I'm glad you've turned political. Hopefully you didn't. But this is a problem. No, they only caught 25. It's not a big deal. It's a good trial error and insurance policy as Mr. um Paul said that's fine. 25 is not Yeah, exactly. There you go. Thanks for the right proper quote. It's not going to matter in future. But I like to point out um let's put some facts to those people who think when the Fed's cutting rates that's good for the stock market. 19 um 2001 the first rate cut came of that cycle in January, second or first first business day of the year. And after that the S&P 500 dropped 45% in to its low in 2022 as we killed towards recession. September 2007 the Fed started cutting 50 basis points. Then stock market put in a high a few days later and then dropped 55% to its low in 2008. Um, so the facts are if we're restarting a easing cycle, the Fed could be behind the the inevitability of US employment going up, stock market going down, and throw in there the nuances of the Trump administration, these extraordinary tariffs pushing back on the Federal Reserve. And there's a lot of little inclaims here to say, well, maybe we just go back to a normal one to one stock market cap to GDP. And I stick with my base case. I started this year and I've been wrong so far. I think we're at the beginning of this the third 50% correction US stock market this um since 2000. It's not a big profound thing to say that we've already had two and it hasn't shown any signs of that yet. That's why I think fourth quarter is everything. But the key indicator that might be right is gold. Gold just keeps taking off. So that's my macro on the big picture there. And um and that's where copper is not kind of it's not it's not fitting in well taking doing what it's doing. But it's it's rallying out recently for the wrong reasons. cuts from, you know, supply disruptions from some mining operations as you mentioned Freeport Macarona. I >> I I still have one quick question about silver actually before we get to copper. Um I got I got to jump in here real quick on silver. Um why is it not able to break out versus gold? Because usually outperforms gold 2:1, 3:1 as you said like the risk, the volatility is 2 to1 as well. Why is it not managing to break out? Is it really just the industrial side holding it back? >> I think so. I think it fits into my macro view that the world's tilting towards a recession. And I pointed out this fact was what's happening in China. China's exporting this deflation to the rest of the world. Why? Because it has to. Now the US is not importing those lot of those cheap goods. Um and um it's a paradigm shift that's way overdue. So questions will change. I think for silver to catch up to gold, you need a pretty significant demand pool shift from the rest of the world, which is all tilting the wrong way right now, facing these US tariffs that are just getting started. Um, but I'm still bullish silver. But let's al look at what's happening with the silver gold ratio this year. This peak was in April around 105. Now that's extraordinarily high. Um, and the range is right now it's down about 83. So when it peaked, it got above 105. That was a pretty good signal to buy silver. It was just too damn cheap versus gold. What happened at the same about the same time is platinum made an all-time new low versus gold and it's popped up since. just, you know, all these other um precious metals are subject to beta when it's going are catching up, but they're all industrial. And now the silver to gold ratio is around 83. The bottom, the base for that silver to gold ratio is basically been between 80 and 105 or so for a couple years. It's nearly lower in the range and it's probably point in time you're supposed to be looking at going back to overweight gold. But the point is if you have a one to one position silver versus gold, you have double the risk you're getting same return. Silver is trades two times the volatility of gold. It rallying at the same velocity of gold is a real bad sign. Now it's going up. That's great. I like to watch one key thing I used to be work at a firm that manages this position, Glitter, Gl. It's a basket of precious metals on the year. It's up 45%. It's up more than gold, trades lower volatility. uh you know I have to been in the business for decades and I've always viewed that as a great way to be exposed to precious metals because you don't have to figure out the nuances between them as an investor but I do expect that gold to continue to rally and particularly as I point out to say to be able to say that 60-day volatility on the S&P 500 right now is the lowest in five years means you're probably better off in gold than any other um of the more high beta high gamma high beta precious metals. At some point when that reverts and and I didn't say if then it might revert back but I'm really concerned now the lower end lower end range of gold versus silver I expect that 83 level it might get down on the 80 to pop back towards 100 in the gold silver ratio. >> I've never heard of glitter that just the ticker alone is intriguing enough. I'll definitely do my homework on that gltr. I pulled it up here. >> Well so you know I'm not you know I'm supporting I don't pump any products. I don't do that. I just know that one cuz I invested in it 10 years ago because I worked for that company ETF securities. I did it. I part of the reason I joined the company because I really enjoyed I really like that way to get involved in precious metals basket. >> You know, it's trying to pick pick out the winners is tough. >> It's just the name reminds me of a meme stock. That's why um I guess >> but it tracks it tracks the physicals. I mean it's that's the key thing. It it's it's it's up this year like a meme stock with a fraction of the volatility. It has an underlying base of gold, silver, platinum, and platium. Obviously, you can tell I used to be quite involved in it. And I say, well, I stick with that one. It's 50% gold and the and the the others are the rest of it. So, >> no. No. Interesting. I'll take I'll take a closer look at I wasn't aware of it. So, just the ticker itself already intrigued me. Um, but Mike, we we have to move. We have to talk copper. Like a big big supply disruption that just happened a few days ago. Unfortunately, there was a uh there was a force majour accident at the Grassburg mine operated by free Freeport McMaran in Indonesia. Um runs a bit through your copper thesis like how has that changed the overall thesis? You already hinted that uh copper might lose its appeal as an economic indicator due to those disruptions. Um what do you make of it? So first of all the key thing about under disruptions and the fundamentals is my colleagues in London most notably led led by my colleague Grant Spora points out it's pretty much in a deficit now he thinks 10,000 is moved to from resistance to support and it's going to continue up and the key thing I like to point out is these disruptions are temporary and almost always temporary they almost give you a spike that's a spike to sell and unless it's in a in a de a demanddriven bull market typically That's not what you want for copper. You want supply spike. Bull markets are definitely typically not enduring. Let's look what happened to some other less more elastic commodities to the peaks in 2022. And that's crude oil and grains are still in downward trajectories because of those spikes in prices. So I'm very concerned copper um I like to use it use the US dollar price copper this year because it's much more relevant this year because of what's happened in tariffs. It's pushing up near near five. I think the risks are it goes lower particularly like I said the 10 in the room now I think for copper economic senses metal is US stock market it'll be fine copper has been fine it'll keep going up as long as new US stock market keeps going up it's up about the same as the stock market this year it's 18% that's great so let's say the stock market gives back 5% of that to me that's a major pressure factor because copper's bumped up and can supply constraints but if it goes down because that demand's going down it'll make it worse and so here's the key thing I like to put copper in the same bucket as Bitcoin it has to go up or else all indications are upward. 100 day week, 50 week, 200 day, all the moving averages are higher. It gets to those dips, you're supposed to buy, everybody's on board. Everybody's bullish. What's the risk? The optionality is it goes down. And that's why I point out this. That's why the US stock market has to go up because they all in the same trade right now. When you get volatile markets, correlations are so tight. Everything's so completely dependent on US stock market. Maybe more so than in any time in history. I put all risk assets in the same bucket. So my headline I just published today might be time to be looking at positive gamma negative delta options positions. They might have an advantage in Q4 particularly when you see fixed volatility index. You know it's still at 16% bearing but overall actual realized volatility in the stock market the lowest in 20 years on a two-month basis. It's not the time to be get excited about things like copper popping. So, I think the risks are um it might bring out the sellers. And that's why I think Q4 is going to be everything. And if things start tilting lower, I think it's going to accelerate downward. And what's the best leading indicator for all this? Cryptos, Bitcoin. They're the most speculative. Um and the key thing, I'll end with one thing about copper. I I like to keep a close eye on manage money net positions. They are running right now on 20% of total um open open interest, which is the highest in a year or so. So, specs are on board. That's great. which means they could be the first sell stops if um we have start having cracks in the arm. And also one key thing I want to end with copper right now the dollar price is 476 or 475 $4.75% 75 the highest um year-end close ever year end as we approach year end was 446 in 2010 and 2021. Can we end the year um with this economic sense of metal sense of metal at an all-time high and to me the risks risks are downward? Yes. This recent pump has kind of thrown me on the mat a little bit, but that's part of being a strategist. Sometimes you get stopped out and you reset. So, we'll see how a couple months from now, see if it can keep it up. We'll see if stock market US stock market volatility can stay low. My thought is risks are volatility will pick up and um copper will be one of the first to suffer. >> The 3% of supply disruption like it is massive. It is it is a big big hit to the market. Of course, the question is like how quickly will that be absorbed? Um, we we've been talking about or the market and coming from the mining side, we've we've been talking about a copper shortage due to EV, AI and and many more factors of course here. Like isn't that pushing it even further into that regard? Like should we be taking maybe copper out of context that you've described like the known framework and maybe look at it a bit different almost like a critical metal? >> Well, okay. When you say EV, my first thought is silver. The most electrically conductive best conductor electricity is silver and it's underperforming gold. Copper is underperforming gold. So why is gold beating them all? Because geopoliticals are more important and that's the thing that's happening is is deflationary. When you mention any type of industrial metal start with China and what did I point out earlier? Deflationary forces in China are significant and they're completely dependent on exporting and that's getting pushed back and the whole world's dependent on US stock market staying elevated. You see the the tilt there? That to me is why gold's beating it. And that's the problem I have with when gold beats copper. It's the highest ever right now. I think it was 780 pounds of copper per one um I'm sorry, pounds of copper per one ounce of gold as we speak. We've never ended the year above like 600. The signs are bad if you look at gold. So they're all rallying as great and I'm worried about um just a little bit of reversion US stock market. We're going to see the see who's wearing clothes. And I suspect the industrial metals um and s they're all industrial metals versus gold these days will have a problem. But again, this is wonderful as we speak. Stock market's great. It's up. I'm just showing the kinks in the armor and the potential for fourth quarter to give us here's one thing. Here's one thing I I will end with I've been looking for for Wells to expect the VIX which has been an upward trajectory in a 200 day moving average certainly since President Trump was elected or well before that when he was elected was 15 or so the 200 day moving average now it's around 19 to expect the VIX not to pop to near 20 um and expect Bitcoin not to back down to near 100,000 before the end of the year I think is unlikely. know those are the key points. You're supposed to sell the first move up around 20 in the VIX. We probably get it. It's just finding the reason you're supposed to probably buy the dip near 100 in Bitcoin. Probably get a reason. Reason I mentioned those are some of the best indicators for everything else. It's if it's after that if we start trickling down below 100,000, copper and everything else will fall with Bitcoin. If we start keeping the VIX above 20, everything goes down. Um gold might even have a problem and that leans things over to deflation and Treasury bonds. Now, that's an hypothetical scenario. I'm potentially we'll see some inklings of in fourth quarter is a question of how much it lasts. >> Fantastic, Mike. Amazing insights. I love your correlations. Um, it makes a whole lot of sense. I can easily follow your your line of thinking where you're coming from. Um, it makes makes a lot of sense to me. Where where can we send our audience to follow more of your work, Mike? >> On your show. Thanks for having me. That's one thing I have to admit is so what I do is um I spend a lot of time doing research and once in a while I get to play show and tell with people like you and I personally appreciate that Kai. So thanks for having me on and to your listeners and visitors who are actually doers. I'm just a seriate you listening. I'm on X first terminal and I post a lot of my stuff on X at Mike Mcloone 111 and LinkedIn Mike Mcloone senior commodity strategist and if people are interested I'm happy to add him to my distribution list. um can just reach out via email. >> Fantastic. Mike, really appreciate your insights. Thanks so much for coming back on. We'll have to catch up soon. There was one bonus question I want to ask you, but we didn't fit in his oil because it has massive impact for the miners as well that we track quite closely here. We'll get to that. >> So, >> the trend's down. We don't have to focus on trend is down in oil. >> Yeah. Fantastic. Awesome. Which is good because margins are expanding for the miners. Fantastic. Awesome. Mike, thank you so much. Everybody else, thank you so much for tuning in. I hope you enjoyed the insights shared by Mike McClone here. He's the senior commodity strategist over at Bloomberg Intelligence. I tremendously enjoy our conversations and if you did so as well, please hit that like and subscribe button. It helps us out tremendously bringing guests like Mike onto the program. Thanks so much for tuning in and uh enjoy the rest of the weekend. Thank you. [Music]