Hormuz Standoff, Silver’s AI Tailwind, and the New Gold Royalty Rush

Marcus Blackwell: MUSIC Sasha Reyes: Welcome back to the Gold Standard. Good to be with you. Speaker 3: And good to be back with you, Marcus Blackwell. A lot moved in metals this week. Let's unpack what actually matters. Sasha Reyes: Thoughtfully, Gold finally took a breather after that three-week rally with the first weekly pullback. The important thing to understand is how that lines up with war risk around Hormuz, oil near recent highs, and shifting rate cut odds. Speaker 3: Right. And here's the question we're asking. Does that dip hint at a fading war premium? Or is it just a pause in an uptrend that still has legs? Sasha Reyes: Then we shift to silver. Its breakout stalled even with AI data centers and solar demand accelerating. Plus that huge jump in China's imports. Speaker 3: And we need to talk about SLV after a roughly 145% one-year run. Position sizing, time horizon, Volatility, these are the things that matter for a new investor right now. Does that make sense? Sasha Reyes: After that we move into the Miners where higher gold prices are turning balance sheets into cash machines and helping drive big M&A along with different royalty and streaming strategies. Speaker 3: And we close by pulling it all together—flows and sentiment from central bank buying to ETFs and bullion plus how someone deploying five hundred dollars can pick a logical starting point. Sasha Reyes: So think about it this way: is gold still a safe haven or is it becoming a more... More Tactical Tool Speaker 3: Let's get straight into it. Segment One: gold price action, geopolitics and inflation risk starts right now. Sasha Reyes: Gold finally blinked this week. After a three-week run higher, Reuters had it logging its first weekly loss since that rally kicked off. Speaker 3: Right. So what specific numbers are you watching right now? Sasha Reyes: According to Reuters and Yahoo Finance, spot gold slipped back toward the low 2300s, with traders focused on support just below and resistance up near the recent record peak. The important thing to understand is that range is where a lot of stop orders are sitting. Sitting Speaker 3: So we had a strong push up, then a pause. What changed between last week's "gold can't lose" mood and this week's wobble? Sasha Reyes: Two big shifts: First, US Iran tensions around the Strait of Hormuz went from imminent escalation to uneasy standoff; second, Bloomberg says traders are repricing inflation and rate cut odds as oil cools off a bit. Speaker 3: Here's the thing: when people talk about a war premium in gold, bold, they mean that extra layer of price tied to fear, not just inflation or rates. Does that make sense? Sasha Reyes: Exactly; think of it like an insurance surcharge. When Hormuz headlines sounded like we might see missiles in the shipping lanes, that surcharge went up fast. Speaker 3: And now that we're in this tense but not exploding phase, some of that surcharge is bleeding out. Sasha Reyes: That is how KITCO framed it; they pointed to profit taking as the price stalled near the highs. and noted that safe-haven buying cooled as traders realized worst-case scenarios had not materialized. Speaker 3: So here's what I'm really asking: is this traders locking in gains or is the safe haven story actually starting to slip, because a lot of listeners own gold as their sleep at night asset? Sasha Reyes: Good question. To put this in perspective, Bloomberg's take is that inflation risk is still alive because oil is elevated versus earlier in the year. After even after the pull back, higher oil can feed into higher headline inflation, which in turn holds up gold. Speaker 3: And on the rates side, futures are still pricing cuts, just later and fewer. Thoughtfully, lower rates mean lower real yields, and lower real yields tend to support gold. The important thing to understand is that specific link. Sasha Reyes: Right—real yields are basically nominal yields minus inflation. This inflation. When that number drops, gold looks better even though it pays no interest. Speaker 3: So structurally, the macro case hasn't broken. What we're really debating is whether that war premium layer is fading faster than the inflation and rates story can pick up the slack. Sasha Reyes: That is the tension. If you think Hormuz risk keeps simmering, this pullback can look like a healthy pause in an uptrend, the kind of reset where strong hands buy from weak hands. Speaker 3: And if you think both sides keep stepping back from the brink, then the last leg higher might start to look like an overshoot that needs to give back more. Sasha Reyes: Exactly. That feeds directly into positioning. Short-term traders, especially those in futures and leveraged ETFs, are asking whether to buy this dip with tight stops or stand aside in case we retest much lower support. Speaker 3: For longer-term holders, the question feels completely different. They're asking, has anything really changed in my three-year thesis? Your thesis about inflation, deficits, and central banks? Sasha Reyes: And for most of those theses, the answer is probably no. The macro backdrop Bloomberg and Reuters describe with sticky inflation risk and uncertain timing on cuts still lines up with holding some gold. Speaker 3: So here's the key insight. A volatile week doesn't automatically mean the Safe-Haven trade is broken. It might just mean the war premium is adjusting. Sasha Reyes: Exactly. The next thing to understand is how this same mix of Hormuz risk Oil Prices and Dollar Swings is hitting the more speculative metals. Speaker 3: Because if gold is wobbling on shifting war and inflation expectations, what happens to the metal that lives closer to industry and volatility than to pure Safe-Haven? Sasha Reyes: Shifting gears for a second: Silver has been the wild child in this move. Price tried and failed at that recent high, then snapped lower almost in sync with oil rolling over and the dollar firming. Speaker 3: Right; that correlation really jumped out this week. When crude cooled off and the dollar bounced, Silver almost exaggerated both moves. Here's why that matters. Sasha Reyes: Silver trades like a hybrid. Speaker 3: Exactly; think about it this way: Silver trades like a hybrid. part precious metal, part industrial metal-so when growth expectations wobble and the dollar strengthens you tend to get outsized swings. Sasha Reyes: And those swings were bigger than gold's. Intraday ranges in silver were wide enough that if you were using too much leverage, you felt every tick. Speaker 3: Here's the thing: short term, that failed breakout level is now the line traders are watching. If price stays below it, fast money treats rallies as shorting opportunities. If it regains that level on strong volume, that looks more like a shake out than a top. Sasha Reyes: And volume matters here; silver often moves on thinner liquidity than gold. The important thing to understand is: big orders, plus a stronger dollar, plus algo trading and suddenly you have that extra volatility. Marcus Blackwell: Now, price noise is one side. The interesting part is what sits underneath it-demand from AI data centers and solar. Sasha Reyes: Yes, according to the silver supply research from Metals Focus, large-scale solar already absorbs a significant share of yearly silver demand, and AI-heavy data centers push even more usage into high-performance electronics. Marcus Blackwell: And on the solar side, higher efficiency panels are still very silver intensive. You can optimize the amount per unit, but if installations keep rising, aggregate demand goes up. Sasha Reyes: That's where China comes in. Reuters highlighted a seventy eight percent jump in China's silver imports, which is a huge tell. You have both industrial buyers and investors inside China pulling more metal. Marcus Blackwell: That number really grabbed me. A move like that suggests manufacturers are either rebuilding inventory or bracing for stronger orders. while investors treat silver as a leveraged play on growth. Sasha Reyes: And if Chinese fabrication plants are buying ahead of demand, that can tighten available supply for the rest of the world, at least at the margin. Marcus Blackwell: Now let's connect that to the supply side stress. The Silver Institute work and the supply article both point to mine output lagging this demand story, especially with grade slipping at some older deposits. Sasha Reyes: Right; you do not have a wave of giant new silver mines coming online. online, a lot of silver still comes as a byproduct from lead, zinc and copper operations, so supply responds slowly when price spikes. Marcus Blackwell: Which sets up that classic squeeze risk: strong industrial pull, growing investor interest and a supply base that can't flex quickly. Sasha Reyes: This leads us to how you express that view. SLV, the big silver ETF, is up about a hundred and forty five percent over the last year, according to Bloomberg. That move prices in a lot of the bullish story. Marcus Blackwell: So here's the practical question: after a run like that, does SLV still make sense as a fresh entry or do you need to treat it more as a trading vehicle and size down accordingly? Sasha Reyes: I lean toward sizing and time horizon: if you think AI and solar demand keep grinding higher for years, a small core SLV position can still make sense, even if you add slowly on pullbacks rather than chase breakouts. Marcus Blackwell: I'm with you. The key insight here is that long-term demand drivers look. looks solid, but the chart screams "fast moves both ways." That argues for avoiding margin, using limit orders, and accepting you might sit through sharp drawdowns. Sasha Reyes: For traders, I would say be very honest with time frames. Silver often overshoots both to the upside and downside, so tight stops around those recent highs and lows become important. Marcus Blackwell: And for long term investors, here's how I'd anchor expectations: silver is not a sleep well at night asset. Position it as the spicy sleeve around a more stable Gold and cash core. Sasha Reyes: Speaking of how all this flows through, stronger metal prices and this demand backdrop are already transforming the cash flow picture for Gold and Silver miners. Marcus Blackwell: Exactly. And that shift is reshaping how miners think about dividends, buybacks and even acquisition strategy going forward. Sasha Reyes: So after the break, we'll move from metal prices to the businesses that pull this stuff out of the ground. and how they're using this windfall. Shifting gears for a second I want to start with cold hard numbers. Newmont just reported first quarter free cash flow of about one point two billion dollars and they tied that directly to higher realized gold prices. Marcus Blackwell: That is a huge swing. A couple of years ago, free cash flow like that felt rare. Now, at these prices, majors are turning into actual cash machines. Here's why that matters. These operators suddenly have real options they didn't have. have before. Sasha Reyes: Exactly. Think of free cash flow as the money left after paying operating costs and capital spending. When that number explodes higher, management suddenly has options: higher dividends, buybacks, or bigger project budgets. Marcus Blackwell: So here is the critical question investors are asking: Do you want that $1.2 billion flowing back to you as income or reinvested in the ground as growth? Sasha Reyes: And that is where the trade-off sits. If Newmont leans into... into dividends and buybacks, the stock can feel more like a bond with upside tied to gold. If they lean into new mines, you take more project risk, but you also get more leverage to long-term prices. Marcus Blackwell: What's interesting, and worth pausing on, is how that cash is feeding straight into dealmaking. Agnico Eagle just committed roughly $3.7 billion Canadian dollars to buy out its partner in Finland and take full control of a major mine complex. complex there. Sasha Reyes: Right. That move basically says two things. First, high quality deposits in safe jurisdictions are scarce. Second, if you're already on site and you know the rocks, paying up for the rest of the asset can still make sense. Marcus Blackwell: For listeners, think of it this way: instead of hunting for a brand new tier one discovery, Agnico is doubling down on something it already knows works, that's scale and de-risking in one shot. not Sasha Reyes: And the broader message from these kinds of deals is that organic growth is hard. So when gold prices are strong, boards feel pressure to use that cash pile to buy ounces, not just drill for them. Marcus Blackwell: Which leads to the obvious portfolio question: If miners are swinging big with M&A, how do you actually manage that risk? Do you own the acquirers, the targets, or something in between? Sasha Reyes: This is where royalty and streaming companies enter the picture. Picture. Take Wheaton Precious Metals as an example: instead of running mines, they provide up front capital then collect a percentage of production or revenue over time. Marcus Blackwell: So they're more like specialized lenders with a claim on metal, not operators dealing with trucks, unions and tailings dams. That's the structural distinction here. Sasha Reyes: Exactly. A recent case that shows this is the Spanish Mountain Gold royalty sale. Wheaton agreed to put money into that project in exchange for a slice of Speaker 4: production. Sasha Reyes: In the case of future production, if the mine gets built and works, Wheaton participates in the upside without owning the site. Marcus Blackwell: And here is the structural difference: if the mine never reaches full scale or hits cost blowouts, the operator takes the operational hit; Wheaton's downside is more about the lost stream than daily operating losses. Sasha Reyes: So, from a risk return angle, traditional miners give you higher torque, but more ways for things to go wrong. Long. Royalties and streams can smooth that out though you usually pay a richer valuation for that stability. Marcus Blackwell: For someone building a portfolio, that might translate into pairing a diversified miner ETF with a smaller slice of a royalty name as a way to blend income stability and upside. Does that framing track with how you think about it? Sasha Reyes: It does, and it links back to the bigger question of who is providing all this capital. On one side, you have royalty firms and miners doing deals. On the other you have those massive steady buyers of gold itself, central banks and ETF investors. Marcus Blackwell: That connection is important. Sasha Reyes: Here's the chain: Central bank buying supports the long-term gold price, which then feeds into higher miner cash flow, more dividends, and richer royalty deals. ETF demand that adds short-term fuel on top. In our final segment, Marcus Blackwell: we'll zoom out to those flows. We'll talk about how central banks and different ETF structures shape the safe-haven story, and where something like a $500 starter position might logically... and where something like a $500 starter position might logically... logically fit. Sasha Reyes: And we'll tie together the metals, the miners, and the royalty plays into concrete portfolio ideas, so you can see how all these moving parts actually line up in practice. Marcus Blackwell: With that in mind, I want to zoom out to the biggest, slowest buyer in the story: central banks. The World Gold Council has shown years of net central bank purchases, and that steady demand is what I think of as the strategic floor under gold. Sasha Reyes: Right, they're not trading headlines. They are building 10, 20-year reserve positions, often to diversify away from the dollar and reduce dependence on other countries' bonds. Marcus Blackwell: Exactly. So when we get geopolitical stress like what we have now... Now, you have two layers. Short term, you see traders and ETFs go on risk or off risk. Underneath that, central banks keep adding ounces on weakness. Speaker 3: Mm-hmm. Sasha Reyes: And that second layer is why you often see pullback stops sooner than they might have a decade ago. There is a waiting bid from official buyers that wasn't nearly as strong in earlier cycles. Marcus Blackwell: So here's the thing. If you're a long-term investor, your time frame is much closer to a central bank. Bank than to a day trader. That is how I would frame gold's role, especially when people worry that one bad week means the safe haven story is broken. Sasha Reyes: Which brings us to the listener question I keep hearing: If I have five hundred dollars today, do I go ETF, physical or miners? Marcus Blackwell: Great question. I'll lay out a framework rather than a prescription. Think of three buckets: liquidity, security, and upside. ETFs lean toward liquidity. Physical leans toward security. Miners lean toward upside. Sasha Reyes: So here's the practical question: If someone says, I might need this next year, then the liquid bucket probably dominates, right? Marcus Blackwell: Yes. In that case, a simple spot-backed ETF like GLD or IAU gives you price exposure, intraday trading, and tight spreads. You avoid storage headaches, but you accept fund fees and financial system risk because it sits in a brokerage account. account. Sasha Reyes: Then there are the higher income funds, covered call gold ETFs; they sell call options on their holdings, and hand you more yield but you cap some of the upside if gold rips higher. Here's why that tradeoff matters. Marcus Blackwell: Exactly. I think of those as "gold for people who are almost neutral." You want some metal exposure, but you're happy harvesting option premium instead of chasing a big breakout. Sasha Reyes: Physical is different. Let's think about this: bars, coins. Earnings may be a vaulted product; lower yield, higher friction, but you reduce custodian and brokerage risk; that appeals to people who think in decades or worry about tail events. Marcus Blackwell: And with five hundred dollars, that might be as simple as a few small coins or a pooled vaulted position; the important thing is understanding that physical is about resilience, not maximizing return. Sasha Reyes: Miners are the opposite end of that spectrum. You're layering company risk. Is cost inflation political risk all stacked on top of the metal price? That's where position size must shrink if your time horizon is short. Marcus Blackwell: Right. With $500, I would usually treat miners as the satellite, not the core. Maybe a diversified mining ETF or a single high quality name, but only if you accept big drawdowns along the way. Sasha Reyes: This ties straight into the Safe-Haven question. Thoughtfully, is gold still a Safe-Haven in 2026? My answer is yes, but with conditions. Let me explain those conditions. Marcus Blackwell: Same here. Safe-Haven does not mean always up. It means that over full cycles, gold tends to hold purchasing power and often zig when risk assets zag week to week. It can trade like anything else. Sasha Reyes: So the key insight is this: the vehicle you choose changes how safe it feels. Physical and simple spot ETFs behave like... Classic ballast Miners and option-heavy funds behave more like equity or income strategies that happen to reference gold. Marcus Blackwell: Let me give one guideline for listeners. Decide first what problem you want gold to solve: inflation hedge, crisis hedge, or speculation; then pick the instrument that lines up with that job instead of chasing last month's winner. Sasha Reyes: And here's my guideline: match time horizon to volatility. If your view is six months, Let's stick with cash and plain ETFs. If your view is a decade, a mix of physical ETFs and a small slice of miners or royalties can all have a place. Marcus Blackwell: The central banks have already answered that question for themselves. They're treating gold as long-term money, not a trade. Individual investors do not have to copy them, but it is a useful North Star. Sasha Reyes: And if you keep that in mind when you deploy that $500, you're already thinking more like the smart money in this market? Market not just reacting to the latest headline. Marcus Blackwell: So, to wrap up, that gold discussion on the war premium around Hormuz set the tone today. It showed how fear, oil, and rate expectations can briefly pull prices away from fundamentals. Sasha Reyes: Right. And then we brought it back to Earth with silver. The key insight is short-term swings only make sense when you line them up against those long-term AI and solar demand trends. Marcus Blackwell: Exactly. One sentence takeaway for you. Match your metal and your vehicle to the problem you're trying to solve and the time horizon you care about. Sasha Reyes: If that framing helped clarify your own playbook, Tap Follow, leave a quick review, and share this episode with one friend who's watching gold or silver. We appreciate you spreading the word. Marcus Blackwell: And if you have questions or want us to tackle your strategy on air, email goldstandard@haymatto.com. Sasha Reyes: Thanks for spending your time with us. Stay curious, stay disciplined, and we'll catch you on the next episode of The Gold Standard.