John Feneck: Gold, Silver — Price Targets, Key Levels to Watch

Key Concepts

• Price Stability: The primary focus of the Federal Reserve under new leadership, prioritizing inflation control over immediate rate cuts.
• Relative Strength Index (RSI): A technical indicator used to identify oversold conditions (typically below 30) to trigger buying opportunities.
• All-In Sustaining Cost (AISC): A metric used to measure the total cost of producing an ounce of gold; lower AISC in jurisdictions like Africa provides higher margins.
• Critical Minerals: Strategic materials (Tungsten, Antimony, Phosphate) essential for defense and technology, currently dominated by Chinese supply chains.
• LFP (Lithium Iron Phosphate) Batteries: A battery technology critical for energy storage and AI data centers, currently facing a supply chain dependency on China.
• Naked Short Selling: A practice where investors sell shares they do not own or have not borrowed, often identified by unusual trading volume in stocks with small floats.

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1. Federal Reserve and Monetary Policy

John Fenick notes a "sea change" in the Federal Reserve’s communication style under new leadership. The approach is characterized by:

• Less Transparency/Wordiness: A shift toward direct, pragmatic communication focused strictly on price stability.
• Inflation Stance: The Fed maintains that inflation remains "stubbornly high," dismissing immediate rate cuts. Fenick highlights a disconnect between official CPI data and the real-world cost of living (e.g., steak prices up 120% over two years).
• Global Impact: The Fed’s guidance remains a primary driver for global economies, and the shift toward less forward-looking commentary creates a higher-stakes environment for investors.

2. Gold and Silver Market Outlook

• Gold Strategy: Fenick advocates for a multi-entry strategy (buying 4–8 times on the upswing) rather than a single lump-sum purchase. He identifies $4,000 as a critical support level for gold. He projects a return to $5,500 by the first half of next year.
• Silver Dynamics: Silver is viewed as undervalued relative to gold. Despite volatility, it holds a strong support base at $60–$61. The goal is to regain the $70–$90 trading range.
• Geopolitical Influence: The resolution of the recent war is a positive catalyst, but ongoing global instability (Middle East, etc.) provides a "higher bid" for precious metals.

3. Mining Sector Analysis

Fenick provided specific insights into several mining companies:

• 1911 Gold (AUMBF/AUM): A restart project with lower risk; currently trading at a discount (45 cents vs. 80-90 cents earlier this year).
• Triumph Gold (TIGCF/TIG): Focused on 2 million ounces in the Yukon; currently "cashed up" and shifting from capital preservation to active drilling.
• African Gold Plays:
  • Siligold (SYGCF/SY): Highlighted for low AISC and high-reward potential in Africa.
  • Extra Gold (XTGRF/XTG): A long-term explorer in Ghana with a massive land package and consistent operational progress.
• Silver Plays:
  • Silverco (SICOF/SICO): Expanding in Mexico; viewed as a strong producer for the coming year.
  • Silver 47 (AAF/AA): Holds 300 million silver ounces equivalent; currently undervalued despite year-round drilling capabilities.

4. Critical Minerals and AI Infrastructure

Fenick emphasizes the "renaissance" of North American critical mineral production to counter Chinese dominance:

• Tungsten: Essential for defense (tanks, missiles). Guardian Metal (GMTLF/GMTL) is a top holding, with 14.9% owned by billionaire Stan Druckenmiller. Western Star (WSR) is identified as a target for short-covering rallies due to its small float and high demand.
• AI Data Centers: A new investment theme. First Phosphate (FRSPF/PHOS) is highlighted for its role in LFP batteries, which are vital for powering AI infrastructure. Jericho (JRF/JV) is noted for its recent joint venture in the data center space, which acted as a significant price catalyst.

5. Synthesis and Conclusion

The current market environment requires a shift in strategy: investors must move away from expecting constant, easy gains and instead focus on "pragmatic" assets. The primary takeaways are:

1. Watch the Fed and the War: These remain the two most significant macro-drivers.
2. Technical Discipline: Use metrics like RSI to identify entry points during market pullbacks.
3. Supply Chain Security: Focus on critical minerals (Tungsten, Phosphate) where North America is currently dependent on China, as these sectors offer significant long-term growth potential.
4. Patience: Avoid the "spoiled child" mentality of expecting immediate returns; focus on companies with strong balance sheets and clear production timelines for 2026–2027.

Quote of Note: "The market is like a spoiled child... these type of investors just expect things to move higher all the time. And someone like [the Fed Chair], he's pretty pragmatic and he's just going to tell it like it is." — John Fenick