I bought Arizona Metals (AMC.TO) a few weeks back on the basis of its chart formation.

The company today just released its Preliminary Economic Assessment (PEA) for its for the Kay Mine project, and it’s a shocker.

Kay shows an after-tax NPV of MINUS (!) US$6 million and an IRR of just 4.9%, against initial capex of US$6…

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Something of a thought experiment today, motivated by the fact that I don’t want to go through another bear market in mining. I’m done with them. The false dawns, the endless grinding declines, the frustration.

You might remember me saying, mid bear market a few years ago, “One more bull market and I’m done.”

So the question I’m asking today is, “when can we expect this bull market to end?” It might already be over, for all I know. Or there might be another five years in the tank.

I’m asking this question because I’m finding myself more and more tempted by high-risk mining exploration plays. I’m seeing value in companies that today have a market cap of C$50 million that a year ago I would have been more reluctant to invest in when their market caps were under C$10 million.

Last week I bought one. I like it. But the way I bought it ignored all the risk-aversion built up over ten years of bear market.

If we are in a secular bull trend for metals, then companies like this will do very well. But come a bear market, they will grind lower and lower, eventually reaching a point where they trade for little more than their cash value.

My broad thesis for gold and silver, as you know, is that we trade sideways for a year, while the market works through the excesses of 2025. A mid-cycle pause, so to speak, before we eventually go to the $7 to $10,000 by the end of the decade. At present I feel more bullish about base metals such as copper and zinc. Rising prices here will preserve the bull market in mining more generally.

But this is just one writers’ thesis.

The mining cycle

So today we are going to study two long-term charts.

I have got a fantastic chart of the copper price, adjusted for inflation, going all the way back to 1900. Copper is a good proxy for industrial metals and to some extent gold and silver as well. There is a lot to learn from this chart, some of it quite unexpected.

Yes, mining and mining methods have changed over the years. Grades used to be a lot higher (there were higher amounts of metal in the rock) but this is offset by improved extraction methods meaning lower grade rock is now economic. Bottom line the world is consuming more copper than ever before.

The mining cycle however still exists. Today, if anything it takes longer than ever before. If there is a shortage of supply of metal resulting in a price rise, it still takes many years and a lot of investment to increase supply from existing mines. Companies, which tend to be risk-averse, have to be persuaded for example that the higher price warrants the extra investment - that the higher price is here to stay. Once the investment is made it can take a long time to build out the mine. Then there are regulators to get past. This can take years too.

As for new mines it can take over a decade or more to take a mine from discovery to production. Making the discovery in the first place can take years too.

All the while there is a shortage of metal and prices keep on creeping up.

Eventually there will be an excess of metal and prices start falling again. Then all the mines need to be shut down. That takes time. Once they’re shut and everyone has lost their shirt, there is considerable reluctance to ever do anything again (see my opening comment)

Then the metal price starts going up again.

The world may be unrecognisable from the first half of the 20th century. The mining cycle is unchanged however.

So what do these cycles actually look like over the long term? And more importantly, where are we now?

To answer that, we need to look at two charts. One, as I say, goes back to 1900. The other is the oldest mining index there is.

One thing to keep in mind as you look at these charts: the biggest gains in mining don’t come at the end of a bull market. They come early.

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Having just spent a fortnight in Namibia, I’ve become attuned to stunning landscapes. Even so, I was blown away by the beauty of the place.

Here are some snaps to get you in the zone.

I went with a French friend who wanted to see the “real England”, but not too far from Stansted Airport.

As we drove into East Bergholt, I began, as I always do as soon as I see them, to despair at the ugliness of modern buildings. No wonder we have so many NIMBYs, when what gets built around beautiful villages is so bland and ugly. Objection is both rational and natural.

But then we turned a corner and everything was suddenly stunning.

It’s not a part of the world I knew. I had lazily assumed all of Essex looked like Basildon. It doesn’t. It was glorious. You could really see the Dutch and Flemish influence in the architecture and the colours they were painted - so different to the equally beautiful Cotswolds, where I was last weekend doing gigs.

We were only sixty miles from London, but it still felt like an England of old, unblighted.

My French companion could not understand what I had been moaning about when I complain about decline. This was the England she knew growing up, and she got excited by everything. Scones. Tea. Churches. Beautiful landscapes. Polite conversation. Phone boxes. Properly kept gardens. Even the beer. “It’s not cold,” she said, before promptly downing it.

My oft-cited complaint that the England she knew is disappearing seemed nonsense. There was no evidence of it here.

As we walked into Manningtree, the buildings got ugly again. Warehouses and industrial buildings, in particular. Nineteenth century warehouses were often things of beauty. Why can 21st century warehouses not be? (The answer lies in our system of measurement, but that’s for another day).

Then we learnt about Matthew Hopkins, the Witchfinder General, who operated here, exploiting the social upheaval of the English Civil War to have hundreds of women executed as witches. Among his methods of getting to the “truth” he used sleep deprivation to extract confessions; he tied victims to chairs and dropped them into the estuary. If they floated, they were witches. If they sank, they weren’t. I guess the victims lost either way. He strip-searched women looking for signs of the mark of the devil. If he couldn’t find any he pricked them with knives until he found the signs he was looking for. Just horrible. Maybe the English past isn’t quite so idyllic after all.

Here’s what makes it worse. For every witch he successfully hunted down, the government gave him fee. He got very rich. Show me the incentive and I will show you the outcome. A lot of innocent dead women. An early gruesome example of the law of unintended consequences. Remind me why I’m a libertarian again.

Today, if we are heading into the civil war many think we are, who knows what kind of witch hunts we are going to see in the name of some nuts ideology?

We caught a train from Mistley back to Manningtree. More grim modern housing. Lots of it too.

More walking then a short river boat tour. We mentioned we were staying at a village up the road, East Bergholt, and one of the locals declared this was the last chance to enjoy it before more new-build goes up. “We need 1.5 million homes,” he said. “The question is, do we have 1.5 million people who are going to buy them?”

Articulated right there is the property crisis coming to a town near you.

I have long argued that beautiful property will keep its value. Ugly new build won’t. Beautiful is pretty much synonymous with period. It was built using traditional measures, where proportion is intrinsic. No such proportion is inherent to metric.

We are already seeing the unravelling of the new-build market in London. That unravelling is coming to everywhere there is ugly new build, whether blocks of flats or houses.

We did find one modern close in East Bergholt that was actually beautiful by the way. So it’s possible. But it’s the exception, not the rule.

This is one of the reasons I invest so much of my capital outside the UK. I don’t like sterling, so I hold gold and bitcoin, and I don’t like gilts. A weakening property market, which is happening right on cue, will create problems for both.

Idyllic corners of England do still exist. Many of them. UK shares already offer value. There is a lot to like in the UK, as my French companion kept pointing out. But there are also big problems ahead, with a leadership class that, shall we say, falls short.

Opportunities abroad, however

I sit regularly on a roundtable with Doug Casey and a number of other mining newsletter writers. A company presents. The experts grill them. The company logs off, and then we discuss it.

I liked this week’s so much I bought shares while the presentation was still happening.

The company is …

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Happy St George’s Day to you.

My apologies for the late arrival of this week’s missive but I found myself without electricity this morning due to, and I quote, “a fault with the electricity”

Never mind. Here we are.

Everything seems so headline driven and yet contradictory at the moment. With every change in circumstance, especially at the Strait of Hormuz, a different narrative seems to emerge only for it to peter away almost as quickly.

You’ve got to be long oil and gas. Buy. There’s no point. The strait is open. Sell.

With so much geopolitical tension you have to be long gold and silver. Debt, deficits, debasement, de-dollarisation, conflict, central bank buying. But gold and silver aren’t moving. They had their move last year.

Equities make even less sense. You don’t want to be long equities. You need to reduce risk. World War Three is coming. And the S&P 500 has just broken out to record highs.

So you end up with this strange situation where the stories are compelling, but the price action is inconsistent. Narrative is not confirming price. Price is not confirming narrative.

That’s usually where mistakes get made.

You feel like you should be doing something. You look for reasons to act. You react to headlines. You convince yourself you’ve spotted an opportunity. And then the move reverses, or fades or never quite follows through.

These are the environments that chop people up. False breakouts. False breakdowns. Strong opinions built on weak signals.

That’s why I am such a big advocate of the Dolce Far Niente portfolio.

Sometimes doing nothing is the best policy. In fact, often.

We had a position in oil and gas so we didn’t need to panic when the bombing of Iran began. We had a position in equities, so even though I was arguing this would be a typical second year of a presidential term, with no meaningful movement until the final quarter, we had exposure to this latest (probably stimulus driven)rally in the S&P 500 to new highs. You can also be wrong, as is often the case when you are a commentator - and it doesn’t matter.

What am I doing with my own money?

Not that much to be honest.

I’m looking around and I can’t see any obvious mispricings. There are areas that look interesting. Software looks attractive. Bitcoin, which has increasingly behaved like a proxy for that part of the market, is quietly ticking higher again. Chemicals look cheap.

Copper too is looking attractive. The long-term story is obvious: electrification, underinvestment, constrained supply. What is notable is that the miners are starting to behave better than the underlying metal. That is often where these moves begin. Our new copper play is already up 20% in barely a fortnight.

There is a Namibian copper story I am looking at too. More on that soon.

Nor am I trimming anything.

There is no euphoria to sell into. No obvious excess. And equally no panic to buy. So positions are left alone.

There is one area where I do have a clear opinion, and that is oil and gas. But my decision is to hold existing positions rather than add new ones.

The market seems to be treating the Middle East situation as temporary. I’m not convinced that’s right - at least not the effects on oil and gas, and I’m staying long, despite the temptation to take profits. I think we are in a new bull market.

Positioning in the sector still doesn’t look extreme. Sentiment is not euphoric. Oil could drift lower if tensions ease and the market continues to treat events as passing rather than structural. But this feels more like the beginning of a bull market rather than the end.

The same goes for gold and silver - mid-cycle pause is my prognosis there. I think bitcoin probably outperforms them over the next 12 months, but If I’m wrong, it doesn’t matter because I own both.

Doing nothing feels like inaction. It isn’t. It is a decision not to play a game where the signals are unclear and the odds are not obviously in your favour.

Right now, that is where I am.

If you’re interested in my three largest oil positions, you can find them here.

Until next time,

Dominic

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Namibia has almost everything. Resources. Location. Roads. A small population. On paper, it should work.

And yet.

Driving through Windhoek, the capital, my guide pointed out a hospital: the Katutura State Hospital.

“You don’t want to get sick here,” he said.

It didn’t look too bad from the outside. A bit craggy. But I’ve seen worse.

The place is infamous apparently. Rats. Endless waits. People lying untreated in corridors. People deliberately go at 3 in the morning, because it betters your chances of being seen the next day. My guide described his own time there when he broke his arm last year. Oof. It makes NHS Accident and Emergency waiting times look slick.

Across the road, stood a gleaming monstrosity - the SWAPO (ruling party) headquarters. Brand new. Vulgar. Expensive. Impossible to miss.

It wasn’t discreetly tucked away. It was right there, bearing down on the hospital.

My first reaction was simply how ugly it is. A few years and that will look truly horrible, I explained to my guide, who seemed baffled by my prediction.

His point, however, that I hadn’t yet thought of, was simply how the building had attracted controversy: all that money being spent on what is essentially a vanity project, with the hospital over the road.

It was built by the Chinese, funded through a grant from the Chinese government, rather than a commercial loan, at a cost of $50–60 million (figures vary). Because it’s a grant, it doesn’t sit as formal public debt.

What could the Chinese possibly want in Namibia. (Clue Namibia, among other things, is the world’s 3rd largest uranium producer and the Chinese pretty much control the 3 largest uranium mining companies operating there. Then there are all those other resources too)

There, in a single snapshot, lies the problem. A classic of the resource curse genre.

Easy money distorts behaviour.

In theory, natural resources should make a country rich. In practice, they often do the opposite. Incentives determine the outcome.

If a government can fund itself from its natural resources, from its oil or metal, what does it care about tax payers? If it doesn’t rely on its citizens, it doesn’t feel accountable to them. Instead of serving the public, the state begins to serve itself.

Money flows in. It gets spent badly, siphoned off, used to entrench power.

At the same time, the rest of the economy suffers. Why build a broad industrial base when the ground is already doing the work for you? You end up with a narrow, fragile system built around extraction.

Two countries with similar resources can end up in completely different places.

Norway built institutions, saved its oil wealth, invested for the long term. Venezuela (which has greater oil resources than even Saudi Arabia), spent it, politicised it and hollowed out everything else.

Don’t get me started on what the UK did with its oil. (First thing the government should do Monday morning by the way is renegotiate North Sea division with Norway).

Same starting point. Opposite outcomes. One has one of the lowest GDP per capitas in the world, the other has one of the highest. The difference is governance. Incentives. Culture.

Namibia now has some choices to make. It is somewhere near the beginning of that path. It has oil discoveries offshore. It is already a major uranium producer. It has copper, gold, rare earths, diamonds, zinc, lithium and tin. Fish. The opportunity is obvious.

But so is the risk. The easy choice is to follow the same path as most of the rest of Africa. The harder choice now, but one that will result in better outcomes, is one of good governance.

The debate around that SWAPO headquarters touches on exactly this point. Despite what I’ve said, there is no single scandal you can point to and say “there it is”. It’s all a bit more murky. But the criticism you hear, quietly and repeatedly, is about priorities. Why spend heavily on political infrastructure when basic services are under strain? Why is the party so well housed while public systems struggle? There are major questions too, as with much infrastructure in Africa, about foreign financing and influence, especially from China.

You don’t need a formal corruption charge to expose everything. You can see it in how capital is allocated.

Oddly, the countries that often do best are those with very little as far as natural resources are concerned. Hong Kong, Singapore, even Venice a millennium earlier. There was no safety net. They were forced to trade, to manufacture, to compete. They had to create value because there was none sitting in the ground.

Namibia doesn’t have that pressure. So it has to choose discipline, and that is the hard part.

When you see a failing hospital on one side of the road and a gleaming party headquarters on the other, it tells you something about priorities. Never mind what politicians say, look at what they do.

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I’ll be back with more later this week.

Thank you for being a subscriber to the Flying Frisby.

Until next time,

Dominic

PS Here is this week’s piece.

I’m travelling, so this week’s note will be brief.

What a country Namibia is. I don’t think I’ve ever been anywhere with so much potential.

But also what a mess. Official unemployment is 37%. Real unemployment is likely over 50%. Can you imagine?

Per capita GDP is about $4,200. That puts it at 119th the global rankings.

The countries that top the list include the likes of Luxembourg, Switzerland, Singapore, Norway, Qatar. Small populations. Either financial centres with low tax, strong rule of law and minimal corruption, or oil-rich.

Strip out the statistical quirks like Ireland, where corporate domiciles distort the numbers, and the pattern becomes even clearer.

With the exception of the US, they are all small, with populations under 5 million.

Namibia has just 3 million people.

Oil has just been discovered offshore. It is the world’s third largest uranium producer, and has an abundance of other natural resources. It’s safe. There is rule of law. It ports are good. Its roads are even better. And its location towards the south of Africa means it can easily sell into Asia, the Americas or Europe.

It fits the template, in other words.

I spoke at a conference here this week. There were senior figures in the room, including the governor of the central bank. I made the case that Namibia could make the top ten within a generation, just as Hong Kong did after World War Two when its per capita GDP was on par with most of Africa. Follow the Hong Kong model - low taxes (they never exceed 14% of GDP), simple taxes and positive non-intervention. (You can read about that story in Daylight Robbery)

It is not such a nuts idea.

Namibia’s people are entrepreneurial. Everywhere I went, someone was trying to sell me something.

Everything is there.

So what’s missing?

“You need minimal corruption,” I said.

That got a laugh.

And there it is.

I’ll have more on how to invest in this extraordinary country soon.

Until next time,

Dominic

Good Sunday to you,

It seems Iran is planning to turn the Strait of Hormuz into the marine equivalent a toll road, or so at least the Financial Times among others is reporting. Ships wishing to pass through the strait must pay a fee of $1 per barrel of oil.

Here’s the clincher: the fee must be paid in bitcoin.

Why bitcoin? It’s the best money for the job.

As it is “permissionless”, no government can order the funds to be frozen or seized. No bank can block the transaction. There is no intermediary. It is outside geopolitical control. Transactions can be made remotely and digitally. Settlement is within minutes. Ownership is clear. The network is sufficiently liquid.

No other widely used currency or payment system in existence has these qualities. Not the dollar, not the euro, not gold or silver, not stablecoins.

Suddenly bitcoin has become “a tool to navigate a global conflict’, in the words of bitcoiner Jesse Tevelow.

A particular company might not like Iran. Iran might not like the company. Neither might trust the other. The two can still transact. Trade can happen between parties that don’t like or trust each other. Trade can also happen outside of politics.

Every bitcoiner has known for some time such a moment was coming. It was just a matter of when. If this is enforced, it would mark the first real-world use of bitcoin as neutral settlement infrastructure in a live geopolitical conflict, where traditional systems cannot operate.

Obviously this only works if Iran can enforce it, and the Strait is not only Iran’s. This is currently only a contingency situation and, if this conflict ends, habits may quickly revert.

There is the other possibility that it does work. Indeed it works so well other nations start copying.

The BRICS nations, for example, might find bitcoin an extremely useful non-US-dollar currency in which to transact.

In which case, this sets a precedent.

My view: the world just changed.

At the other end of the scale, we have my little life

And the same problem - fiat inadequacy - presents itself though rather more mundane circumstances.

I’ve been travelling through Namibia this past fortnight, on my way to give a speech at the Cirrus Investment Conference.

When I arrived at the airport, I couldn’t get my card to work in the ATM machine, but I had £200 in cash which I changed - no doubt at some over-priced rate - for local dollars. This was the only cash I had.

I’ve been staying at various lodges across the country, all in the middle of nowhere, and I have had a terrific time, but I’ve needed money to tip my various guides, lodge staff, drivers and so on, but with no access to cash.

The banking system didn’t work. The card failed. Cash was finite. The people I wanted to tip couldn’t take card payments. We still wanted to transact.

So I’ve been using the opportunity to orange pill the locals. Instead of local dollars (which by the way is pegged to the South African rand), I’ve got every member of staff to download a wallet onto their phone, and I’ve tipped them in bitcoin. Everyone so far has been delighted at the arrangement, and the locals now have some money that might appreciate in purchasing power.

I’ve told them to HODL their coins for at least 5 years and then perhaps this little tip might be worth something.

In the meantime I’ve told them to read up on bitcoin - watch vids, listen to podcasts and so on.

As I argue in the book the first step on the bitcoin journey is to download a wallet and practice sending and receiving small amounts of money.

So you have the same function at two extremes: bitcoin works where other forms of money fall short.

Once again I urge you to have some exposure to this extraordinary tech. ETFs are the simplest way - but they are far from permissionless, as anyone dealing with the FCA will tell you. Charlie Morris’s BOLD is another option and one I some in my own portfolio.

But the best way to start with bitcoin is to sign up to an exchange and buy twenty quid’s worth.

Here’s a little story for you.

About ten years ago, around the time I wrote Bitcoin: the Future of Money?, I was at the Port Eliot festival in Cornwall where the internet signal is bad, or was back then. “Accepting bitcoin” it said on one of the little cafe vans. “What’s bitcoin?” a mate standing next to me in the queue said. I told him, sent him a fiver’s worth and told him to use it to buy us each a coffee.

The bloke selling the coffee couldn’t get a proper signal on his phone, other people in the queue were getting impatient and so my mate paid in cash and we both forgot about the bitcoins.

Several years later when bitcoin went on one its runs my mate messaged me. “Hey, you remember those bitcoins? Well I got out my old phone, retrieved the wallet, sold them and bought myself a car.”

It wasn’t a Ferrari or anything like that. Just some second-hand family motor, but even so quite the gain.

I doubt those tips will get the Namibian locals a car, but you never know.

Why Adam Back is not Satoshi Nakamoto

Finally, there was a big story in the New York Times this week arguing that cypherpunk coder Adam Back is Satoshi Nakamoto. Author John Carreyrou spent over a year on the story, but I’m afraid - and I’ve been there - he suffers from a terrible case of Prosecutor’s Bias. He has decided who he thinks Satoshi is and then found coincidence after to fits the story.

If you’ve read the book, you’ll know Adam Back was a prime candidate, but one that was easy to discount, because he wrote in a different coding language - C - to Satoshi, who wrote in C++. Indeed, Satoshi came to Back for advice on the White Paper, which Back gave him (you can read the email correspondence). Meanwhile, Back then only came to bitcoin relatively late, in 2013 - and set up Blockstream almost as a catch-up play, which he wouldn’t have bothered doing if he was Satoshi who at this point was worth a 9-figure sum.

I wrote a thread on X about it, retweeted by Adam Back himself - so it may be of some interest.

Here is this week’s commentary:

Thanks for being a subscriber to the Flying Frisby.

Until next time,

Dominic

PS Bitcoin: the Future of Money? is available at Amazon and all good bookshops.

Everything is Iran-news-driven at the moment. So much noise. False breakouts. False breakdowns. Easy to get lured into bad decisions.

It’s a good time to strip out the noise and come back to the charts.

Spikes up, such as we saw yesterday in reaction to the two-week ceasefire, are characteristic of bear markets. They may bring relief, but they can be “smooth comforts false”, as a certain bard put it.

I’m sticking with my broader outlook. Things do not stabilise until Q4.

As for the charts I keep coming back to one pattern. One that has been more profitable for me than anything else.

It’s simple. Repeatable. And it tells you exactly when you’re wrong.

Some spend hours pouring over balance sheets, identifying value. Others follow trends. Others look to the stars and base their decisions on astrological signs - often with tremendous success, I gather.

Others like patterns. Billionaire Peter Brandt made his fortune trading commodities, basing his decisions entirely on price patterns.

Sometimes I think I should just look for this pattern and ignore everything else.

I’m going to tell you about this pattern today, and then tell you about two companies I’ve found that fit the bill, right here and right now.

What you’re looking for is this.

Many years of decline from a high level to an eventual low. Not weeks or months, but years. A relentless grind lower. Everyone involved has got their fingers burnt. The company (or commodity or currency) is now loathed.

Then a small bounce of the dead cat variety. Weak, insipid. But what glimmer of hope may have appeared with that bounce is now destroyed as the asset in questions goes back to its old lows.

Here’s the important bit. You want that re-test of the low to hold. Maybe it even get retested a third time. But each time it holds. It means the declines are over. The sellers are exhausted. Now there are as many buyers. There are no more sellers. Then you have something interesting.

So you buy somewhere after the successful retest. And then you wait. You might have to endure another retest.

But, crucially, you know where you are wrong. If the lows break, the pattern has failed. You get out.

That’s the framework.

It was this pattern that got me into SM Energy last December at $19. Today, four months on, it’s at $31. It got me into Lightbridge a couple of years ago at $3 - and that went to $30. It got me into Meg Energy (MEG.TO) at $3 and that recently got taken out at $30.

Here are we see this pattern illustrated in a mystery chart.

You can see this chart spans many years. From highs in 2004, we saw 11 years of decline until late 2015. Then the market went sideways.

Those 2015 lows were re-tested multiple times, lastly in 2025, and they held. Many lost patience, I know I did. Many stopped believing.

Pattern-wise, what you are looking at is of a sort of W. The first three legs are in place. The fourth is the move you want to ride.

Do you recognise the chart?

It’s the ratio of gold mining stocks (HUI) to gold.

And what happened next?

2025 is what. One of the best years for mining stocks in a long, long time.

You can see in close up how that low even retested 3 times in early 2025.

But in the broader picture, mining stocks have barely rallied, compared to gold.

We don’t need anything like that to make serious money. A move back to 2010–11 levels would be more than enough.

The point is the setup. Long decline. Weak bounce. Re-test. Hold. Move.

This chart required years of patience. And pain.

You can find shorter-term versions of the same pattern, and that is what I am going to look at today. I have bought one of these companies in my own portfolio, and I am about to buy the other.

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And Happy Easter.

Today’s missive comes to you from Namibia, where I am giving a talk on gold at the Cirrus Investor Conference next week. I’m right out in the Styx at the minute and internet is patchy so I’m keeping this brief.

Here’s the view from my window, if you don’t believe me.

Coming to America

Meanwhile, just as I was setting off, the US copies of the Secret History of Gold arrived. So watch the unboxing.

What do you think of the cover?

I’ve been delighted at the response to the book in the UK. The reviews on Amazon have been excellent, averaging 4.8 stars, which is good. The audiobook has done just as well. In fact, I get 4.9 for performance. How about that?

People have bought multiple copies whether as gifts or to gold-pill difficult relatives. Both my agent and my publisher are pleased with sales. So everything tickety boo.

But the US is the Big Test and next month the book comes out there, published by Pegasus. Which means American readers can finally get your copy.

I'‘m obviously super excited, and come May you’ll probably find me on multiple podcasts promoting the merchandise.

Here are some links. Get your copy of The Secret History of Gold

• in the US

• in the UK

• and everywhere else.

Until next time,

Dominic

PS Finally, here is this week’s commentary, in case you missed it. It includes my thoughts on top pick, Metals Exploration (MTL.L) , following its construction update.

You’ve probably heard: gold has just had the worst month in its history.

Given that gold is older than the earth itself, that’s quite a long history.

What headline writers actually mean, even if they don’t know it, is that: in US dollar terms, gold just had its worst month since 1971, at a stretch 1789.

But the US dollar is a bogus, fiat measure, and the sooner we start using constant money as our unit of account, the more truthful the world will become.

Gold hasn’t changed. It doesn’t. What has swung, violently as ever, is the price of fiat.

The move looks more extreme than it is because of where the month started. Gold began March near a high, around $5,400, and then sold off hard. A thousand-dollar swing sounds a lot, but after the run we’ve just had it’s not especially surprising. Indeed I would go as far as to say it’s normal.

Here is a 3 year chart of gold to put the March move in some perspective. I’ve also added a very useful indicator - the 233-day exponential moving average - in red.

233 is a Fibonacci number, and with roughly 250 trading days in a year, the 233 EMA works out as roughly the one-year average, but with the added magical quality that Fibonacci numbers often seem to have. In this case, it caught the exact bottom, as you can see.

What effectively has happened is that after a long run-up gold has pulled back to the one-year average and bounced off it.

What we’re seeing is normal behaviour in a secular bull market.

Corrections feel violent at the time. They always do. But this is what bull markets do.

My view remains unchanged. We are somewhere in the middle of a multi-year move that ultimately takes gold into the $7,000 to $10,000 range.

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The bigger point is not the chart, it’s the backdrop. I keep saying it, but you absolutely must own some gold in your portfolio, particularly if you are in the UK, indeed anywhere in Western Europe. We have big, big problems coming down the tracks and they are going to result in the further debasement of the national currency.

Debt levels are rising, not falling. Governments are spending more, not less. The cost of servicing that debt is going up. The political incentives all point one way: more issuance, more intervention, more currency debasement.

The UK is a particularly clear example. You can already see the strain in the gilt market, the pressure on public finances and the complete lack of both political will and ability to address it in any meaningful way. No party is going to fix this. The system itself is broken.

There is only one way fiat money is going and it’s the same way it’s always gone.

Treat pullbacks like this for what they are: opportunities.

If you don’t own gold, you are relying entirely on a monetary system that is under visible strain. That in itself is a bet, whether you realise it or not.

Onto more positive news - or is it? Squeaky bum time in Nicaragua

My largest position, and a core holding for many readers, is Metals Exploration (MTL.L).

Broker Hannam has just put a 37p price target on this 13p stock, implying roughly 3x upside. The current market cap is about £400 million.

The share price has pulled back sharply after its recent run to 19p to around 12–13p, largely tracking the ups and downs of gold.

The company has just issued a construction update, following a recent site visit to the main project in Nicaragua, La India, attended by major shareholders including Nick Candy.

Execution is everything now, and it’s squeaky bum time.

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I’m making a change to the pricing of The Flying Frisby to simplify things and bring more readers inside.

Monthly is now £15 and annual is £150.

If you’re on a monthly plan, you can switch to the new rate - or move to annual for better value.

If you’re already on an annual plan, your subscription continues as normal, and will renew at the new annual …

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Markets have well and truly shifted into risk-off mode. What to do? Conserve capital, have plenty of cash, stay exposed to energy, and be selective elsewhere. That is what I am trying to do in my own portfolio.

In this week’s commentary, I flagged a number of UK stock ideas. I must say I really like the look of the chemicals, although I’m not quite ready to jump in just yet. The sector has been beaten up, valuations are low, the industry appears to have tidied itself up and there is plenty of demand for its product.

Gold is struggling with rising rates are a headwind, but the house view remains that we range trade for a year. What we are experiencing is a mid-cycle correction. These can be frustrating.

I was encouraged by Friday’s action, which saw stocks markets sell off, while gold rallied. One day does not a market make, but that’s a healthy decoupling I’d say and signals that the hot money has left the sector and gold is no longer deemed a risk-on asset.

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Silver is holding up surprisingly well - I expected it to hit $50 if gold hit $4,000. But it never got close. We’re currently at $69 - and the $60 handle has held.

A man I was speaking to last night was having a go at himself for not selling his gold when it was 20% higher. The problem when you sell is buying back: it’s a surprisingly hard thing to get right and very few do with the result that you end up without a position. “Just hold onto it and forget about it,” I told him. If you’re in the UK you just have to own some gold. The political risk to the currency is too great. But he carried on beating himself up.

In other news, I have been taking part in some investment roundtables organised by veteran speculator Doug Casey and not quite so veteran Matt Smith.

A junior resource company presents to a panel of seasoned experts, who then grill the company. The company then leaves the call and the panel discusses what it’s just heard, often quite candidly.

If you’re a speculator in this small cap neck of the woods, then it might be of some interest. Here’s a link to this week’s.

Doug Casey's Experts Roundtable

Doug Casey Thinks Midnight Sun Could Be a 10-Bagger.

A lot of junior mining companies tell a story…

Listen now

a month ago · 46 likes · 7 comments · Matt Smith @ Crisis Investing, Dominic Frisby, The Macro King, E.B. Tucker, Doug Casey, Lau Vegys, and Metals and Miners

I’m travelling this week, but I’ll be back on Wednesday with my mid-week commentary. Goodness knows what the world has in store over the next few days. Not too many surprises, I hope. In the meantime, keep your powder dry.

Until next time,

Dominic

At the beginning of the year, one of my proclamations was that UK stocks were looking decidedly cheap.

That view hasn’t changed.

Yes, the country is a mess on numerous levels. But so was Japan in 2015, and its stock market went on to perform very well off the back of depressed valuations. There are parallels.

I said I would cover UK opportunities, and I will. There are plenty. But I tend only to write about what I am actually investing in. It keeps incentives aligned. And here’s the problem.

I haven’t quite been able to bring myself to pull the trigger.

The reasons are obvious.

First, the decision by a certain homme orange to bomb Iran. We are seeing the opposite of “Drain the swamp” and “I’m not going to start wars, I’m going to stop wars”. There is no clear victory in sight and we do not yet know what all the repercussions will be, except that there will be lots of them.

Second, the resulting rise in the cost of energy. Economies need a base of abundant, cheap energy on which to grow. What they do not need is constrained, expensive supply, and that is the reality the UK now faces, a mess largely of its own political and ideological making.

High energy tighten financial conditions. They squeeze margins, lower disposable income and reduce activity. Economies need the opposite.

And that brings me to item three on the agenda: the cost of capital. Borrowing costs have risen again across the board. For the government: ten-year gilts are around 5%, the highest since 2008 and above the Truss spike. The UK has the highest borrowing costs in the G7. Aren’t you proud?

Mortgage rates have also risen, with most fixed rates now above 5%. This means remortgaging pain for hundreds of thousands of households, as exisiting deals expire.

Headline inflation is now above 3% and the Bank of England Governor Bailey has said further rate cuts are “not on the horizon.”

The knock-on effects are visible everywhere. Company insolvencies are at 30-year highs. We are teetering on the brink of a house price crash - it’s already here if new build is your thing.

And here’s another telling indicator: car production has collapsed from 1.7 million units in 2016 to around 700,000. Demand, both from abroad and at home, is weak.

Fourthly, there is my macro call that in quarters 2 and 3 of this year, if markets are going anywhere, it’s sideways or down, as per the typical second year of a presidency. Things won’t get moving till Q4.

I also like to have cash available for the kind of sharp sell-offs that appear from time to time. We seem to be on the cusp of one but it hasn’t quite materialised.

So the situation is this: UK equities are cheap. Very cheap in places. But the broader investment landscape has deteriorated.

Yet valuation is everything. When things are priced for bad outcomes, you do not need perfection. You just need things to stop getting worse.

There are pockets of the UK market trading on deeply depressed assumptions. Entire sectors where sentiment has overshot reality. If the macro stabilises even slightly, the upside could be significant.

So here is what I am looking at.

Some of these are obvious. Some are not.

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Today’s missive comes to you from the Basque Country: from Saint-Jean-de-Luz on the south-west coast of France, close to the border with Spain. And what a splendid corner of the world this is. It feels like the France of my childhood, full of French people being French doing things French people do, like closing the shop during peak business on a Saturday afternoon to go and have lunch for three hours.

This is in strong contrast to Paris, where I was a few weeks ago, which has lost its identity and may as well have been anywhere.

But, yes, lovely food (especially the ham), lots of lovely squares, churches (I’ve said my prayers three times today and it’s not even tea time), a terrific hike in the hills this morning, spring flowers, everybody’s well dressed and gorgeous, especially in nearby fishing-village turned desres, Guéthary, where property prices defy gravity. A bit like a French Padstow, but more pristine.

To my great pleasure, I discovered today that Marie Antoinette did not actually say, “Let them eat cake”, but “let them eat brioche” (“qu’ils mangent de la brioche”), which tickled me. Much more bougie.

But the truth is: she probably never even said it. How history gets distorted, especially in translation.

Which brings me to this week’s commentary. 2008 has been misremembered too. Everyone talks about subprime. Few talk about the oil shock that came first.

Today there is panic at $100 oil, but if the oil crises of 1973-4, 1980 and 2008 are anything to go by, you ain’t seen nothing yet.

That’s Love

On a hard drive of my dad’s, I discovered 4 series of the 1988-92 ITV sitcom That’s Love, starring Jimmy Mulville, Diana Hardcastle and others.

My daughter-in-law, Millie, has uploaded it all to YouTube for me, and I am happy to share it with you here. Gets better and better as the series goes on. A reminder of what TV used to be.

• Series 1

• Series 2

• Series 3

• Series 4

Photos from France

Here’s a vid and a couple of snaps for your viewing pleasure.

Never mind the dodgy mortgages, oil spiking to $150/barrel in July, 2008, just before the panic set in, was as big a cause of the Global Financial Crisis.

The price rise was like a sudden, unexpected liquidity drain on the economy. The US economy is built on oil. Costs suddenly rose across every supply chain. Disposable income was sucked out of households. Corporate margins got squeezed and inflation expectations rose effectively tightening financial conditions, just as the system needed liquidity. Funding costs then rose and collateral quality deteriorated. In a system already stretched with cheap credit and thin margins, highly leveraged institutions and ordinary borrowers were simultaneously pushed over the edge. The structure was fragile and it only worked in a low energy, low rate world. Subprime may have been the trigger, but the energy shock had already destabilised the foundations.

The oil price tightened financial conditions before central banks did

This is not a one-off

As Charlie Morris points out in his piece What Happened in 1974, there have been three major oil shocks - in 1973/4, 1980 and 2008.

In 1973 the US was dependent on Arab nations for most of its oil, and shortly after the Egypt-Syria alliance suddenly declared war on Israel, oil-producing Arab nations imposed an embargo on any nation that supported Israel. “You can support Israel or have cheap oil, but you can’t have both,” the Saudi Arabian king had said on US TV.

The oil price went from $3.50 to $10. It would eventually peak at $39.50 in 1980.

I was only a little boy in the 1970s but we lived in South Kensington and I remember how many Arabs suddenly moved to the area, many of them with a great deal of money. My step-father ran a business in Belgravia selling modern Italian furniture and his clientele changed almost overnight. Hundreds of billions of dollars, previously in Western bank accounts, now made their way to the Gulf in a transfer of wealth like no other. Next came the Rolls Royces, the racehorses, the Harrods shopping sprees (indeed Harrods itself), the mansions, the public school educations, the City petro-dollar recycling trade and yes the over-priced, glitzy, Valentino furniture. London would never be the same.

And what impact did those years have on bond and equity markets more generally? The 1970s were horrible, unless you were long commodities. The low reached in 1982 was so extreme that it marked one of the greatest long-term buying opportunities ever known, perhaps the greatest. While 2008 had its own consequences, not least the end of the City as a leading player in the global financial system (thanks to the regulation which followed), followed by the general decline of London.

Each of these episodes follows a similar pattern: an energy shock tightens conditions, exposes leverage and forces a reset.

It might not feel that way today with oil at $100, but we are still a long way from the extremes of 1974, 1980 or 2008. A lot of commentary is saying the investment world is too complacent and has not factored in what is coming.

What is 2008’s $150 oil in today’s money?

I’m not going to give you the CPI numbers because I consider CPI a bogus measure. Using money supply instead (M2), the equivalents look like this

• 1974: $10 oil ≈ $120-150

• 1980: $40 oil ≈ $360-440

• 2008: $150 oil ≈ $375-450

In the context of those extremes $100 oil does not look unreasonable

The sub-$60 prices with which we began this year now look extraordinarily cheap. I don’t think we are going back to them any time soon.

I’m also not saying we are going to those comparable numbers above. I merely show them for context.

In terms of where we are going, I think Charlie has it right when he says, “We should assume that $100 oil implies a slowdown, $150 a recession, and $200 a depression”.

$200 is not impossible if this was carries on.

What to do?

Let’s take a quick look at how to position ourselves, and at what’s in store for gold, silver, miners and the equities markets.

It was the right call to move into energy at the beginning of the year, I’m pleased to say. With such quick profits the temptation is to sell. I’m maintaining my positions.

The US, especially after the Venezuala episode, is self-sufficient in hydrocarbons. Europe is not. Whose oil and gas will it be buying now that Gulf supplies are in doubt, and Russian supply is off-limits?

Meanwhile, high energy prices make shale extraction profitable again.

North American oil and gas comes out of this strong.

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Here is this week’s commentary. Take a look if you haven’t already.

This week saw the 250th anniversary of the publication of The Wealth of Nations, Adam Smith's most famous book. Smith was so obviously right about so many things, it amazes me that we still need to not only explain, but actually make the case for his ideas today.

So today’s Sunday thought piece is the film we made about him. I’m proud to say IMDB gives it a rare 10/10 ranking (only six people voted, I know, I know).

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Alex Webster and I made Adam Smith: Father of the Fringe during the lockdown. We think it’s a really good film with a powerful story.

You get a handy summary of Smith’s ideas in the first 15 minutes, followed by the incredible story of the greatest arts festival the world has ever seen. Watch it on a big screen, if you can. It’s worth it.

It also features Jimmy Carr (early in his transition to thought leader), Al Murray, Henning Wehn, Shazia Mirza and Arthur Smith.

You might like the story of how it came about. Director Alex Webster and I went up to Edinburgh and shot the film in the year the Fringe was cancelled, believing that because television production had halted during lockdown there might be an opportunity for outsiders like us, able to produce something good quickly, to break into TV.

We needed some capital to get over the line (post production, music, archive footage etc), and managed to snag a meeting with the head of BBC2 and the BBC Head of documentaries. They politely declined and then went away and made a “similar” film 6 months later (only not as good, of course - theirs didn’t get 10/10 on IMDB).

Then, out of the blue, a multi-millionaire video games entrepreneur, who had had a near-death experience with Covid, stumbled across my YouTube vids, got in touch to say thank you for making him laugh on his deathbed, said he’s like to help with anything and the next day I had twenty grand to finish the film.

What incredible good luck. But I guess, if you keep putting stuff out there that people like, you increase the probability of getting good luck.

(Incidentally, the only other feature I’ve written, Four Horsemen, got 7.7/10 on IMDB, from over 3,000 votes, which is very respectable. More to the point, it got more than 10 million views on YouTube alone. People don’t even realise I wrote that film because of the, yes, well, we move on.)

Finally, I appeared on the reform party podcast last week, in case of interest. Here it is:

Until next time,

Dominic

PS Here’s that gold piece again, because it’s worth it.

Gold bull markets can feel even more eternal. Not just because the metal itself is eternal, but because the story comes along that we are going back to a gold standard, or that the Great Purge, which many economists of the Austrian school say is inevitable after fifty years of fiat decadence, is finally upon us.

I get that argument. But it is too neat, too deterministic. Real life is much more mucky.

So today I want to consider a very important question, and I want to try and answer it honestly:

Where are we in this bull market?

Has gold already peaked? It’s possible. The spike to $5,600/oz at the end of January had many of the hallmarks of a blow-off top.

Or perhaps $5,600 was just a mid-cycle peak, such as we saw in 2006 or 1975-76 during previous bull markets.

Or is this bull market still in its infancy?

I’m going to study this bull market through every lens I can think of: price, time, valuation, participation, market structure, macro context and sentiment.

My bias going in is that we are mid-cycle, as I argued in my Great Forecast last week. Let’s see where I end up.

1. Duration

There have been two great gold bull markets since the end of the gold standard: 1971-1980 and 2001-2011. Both lasted nine to ten years.

When did this one begin?

It depends how you define it.

You could take the bear-market low of $1,045 in late 2015. You could take the $1,160 retest in 2018. You could take 2019, when gold broke out of its multi-year base.

Technical analysis is often in the eye of the beholder. Just like bull markets.

You could even argue late 2022, when the current acceleration began.

If you start in 2015, this bull market has already lasted ten years. That would put it right in line with the duration of previous cycles, and you could argue it is close to exhaustion.

If you start in 2018 or 2019, there may be several years left to run.

I favour 2018. Just as gold hit $250 in 1999, rallied, and then returned to roughly the same level in 2001 before the real bull market began, the 2018 low feels like the equivalent retest. Of course this is debatable.

And there is always the possibility that this bull market lasts longer than previous ones.

Verdict: mid- to late-cycle.

2. Relative valuation vs other assets

Oil

With gold at $5,200 and WTI crude around $87, it takes roughly 60 barrels of oil to buy one ounce of gold.

Historically this ratio ranges between 6 and 30.

The only time oil has been this cheap relative to gold was in the 2020 pandemic collapse, when oil went negative.

My view: it’s not so much that gold is expensive as that oil is cheap. Plus commodities inevitably get cheaper as we get better at producing them. (As long as you don’t measure the price in fiat).

Gold vs the S&P 500

With the S&P around 6,765, it takes about 1.3 ounces of gold to buy one unit of the index.

This ratio has been as high as 5 - at the peak of Dotcom in 2000, and the nadir of gold - and as low as 0.2 (during the depths of the 1930s and at the 1980 gold peak).

Gold is therefore on the expensive side relative to equities, but not at historic extremes.

This ratio could fall further if equities fall or gold rises.

Gold vs US housing

The US housing market varies enormously by region - Beverely Hills is not Detroit, Miami Beach is not McDowell County - so national averages should be treated cautiously. But they still give a rough guide.

We are now below the 2011 level and approaching 1980 territory in terms of how many ounces of gold buy a typical home.

Pretty extreme.

Overall verdict: late-cycle. Warning signal

3. Institutional ownership

Gold is still under-owned in institutional portfolios.

Even after the recent rally, gold represents only a tiny fraction of global portfolio allocation compared with equities and bonds.

Gold mining equities are even more neglected.

Verdict: mid-cycle

4. Central banks

Central bank buying slowed to 863 tonnes in 2025, down from record levels in 2024, but still well above the 2010-2021 average.

However, the World Gold Council reported that central banks purchased only 5 tonnes in January, below the monthly average of 27 tonnes. I would not read too much into that. Much buying is reported with delays, and China in particular reveals little about its activity.

The usual assumption is that central bank buying is an early or mid-cycle phenomenon. I am not entirely convinced. If the real driver of this bull market is de-dollarisation and reserve diversification amidst a wider geopolitical shift, then official buying could persist for years.

Gold currently represents just under 30% of central bank reserves. The US dollar still accounts for roughly 56%.

I don’t think this bull market ends until gold sits north of 50% having overtaken the dollar itself.

Question: is the war in Iran going to arrest of accelerate de-dollarisation? You know the answer.

Verdict: mid-cycle

5. Retail participation

Retail demand is growing. 2025 saw record bar and coin demand. ETF inflows are rising, but they are not exploding. Mining companies are finally attracting interest again.

Silver went briefly manic last month, which is not a healthy sign, but the episode is already unwinding.

Verdict: mid-cycle

By the way, due to its senior currency status, the US dollar is going to preserve its purchasing power better than the pound, which is a car crash waiting to happen. I keep getting asked, “is it too late to buy gold?”. If you are in the UK, . We are turning into South Africa and the currency will go the same way. The 40% loss of purchasing power that the pound has seen since 2020 is not going to reverse. If anything it accelerates. Thus …

6. Leverage

Leverage is difficult to measure precisely.

You can look at: futures positioning on Comex, options activity, speculative flows into junior miners, retail spread betting and more. The short answer is this: gold is a crowded trade, but it is not a mania.

If it were a mania, the geopolitical shock in Iran last week would have triggered violent liquidations. Instead gold held up remarkably well.

Verdict: mid-cycle

7. Mining equities

Mining stocks had an excellent 2025. Word is that PDAC last week (the world’s largest mining conference), was the like of which had not been felt since 2011 and the last top. That is a warning sign.

This chart shows the ratio of the XAU (large mining companies) to gold since 1988.

On a relative basis the miners are still phenomenally under-owned, and we now have a text-book base, formed over 9-years, in place. If this ratio goes back to levels of the early 0 0s , miners will multiply many times over.

But these declines began with the emergence of the ETFs and the many alternative ways to own gold without taking on individual company risk. The ratio does not have to go back 00s levels.

Maybe. But that base is a thing of beauty.

Typically the end of a gold bull market would coincide with massive rallies in junior miners, an exploration IPO boom and a merger-and-acquisition frenzy.

We are seeing healthy signs of activity, but nothing like that yet.

Verdict: mid-cycle

8. The narrative - gold to $150,000?

Gold got some coverage in publications like The Economist and the Financial Times last month, but the story is far from mainstream.

Ask most people about de-dollarisation, Triffin’s dilemma or central bank reserve diversification and you will get blank looks.

However, some familiar late-cycle narratives are beginning to appear.

One is that silver is being remonetised.

It isn’t.

Silver may well be an important strategic metal, but its monetary role was as medium of exchange. That role is not coming back because we no longer use physical money. That function has been digitised.

Gold, by contrast, retains its role as as store of value - a function that silver never had to anything like the same extent. Silver may have use as a speculative asset. It may well rise in price. It may even overshoot spectacularly. But it is not being remonetised. That will not happen, unless Eastenders turns into Mad Max.

Another narrative that sometimes appears near major peaks is the US national debt relative to gold reserves. In 1980, headlines declared the US was “solvent again” because it could have used its gold to fully settled its debt.

Today US debt is roughly $39 trillion. To settle that debt using America’s 262 million ounces of gold, the gold price would need to be roughly $150,000 per ounce.

When arguments like that start circulating, it means the narrative can’t go much further and the cycle is close to exhaustion.

We are not there yet.

Verdict: mid-cycle

9. Real yields

Last but not least: real interest rates.

This would be the 10-year Treasury yield minus inflation, or the 10-year TIPS yield.

Gold bull markets tend to end when real yields rise sharply.

In 1980, Paul Volcker pushed interest rates toward 20% and real yields surged. Gold then entered a twenty-year bear market. At the 2011 peak, real yields rose from deeply negative to positive and gold topped within months. From 2020–2022 real yields went negative again and gold surged, until they rose in 2022 and gold stalled.

Today nominal yields are relatively high, but inflation remains elevated, the Fed is under pressure to ease (as are most central banks) and fiscal deficits are enormous.

Real yields therefore sit around zero or slightly positive, depending on how they are measured. That is not restrictive enough to kill the gold bull market.

The danger signal would be inflation falling sharply while nominal yields stay high, pushing real yields well above +2%. We are some distance from that.

Verdict: mid-cycle

Conclusion

If gold continues rising it will pull silver and mining equities higher with it.

The spike in silver last month to around $125 looked very much like a mid-cycle blow-off, and a period of consolidation is now both likely and healthy.

Looking across all the indicators, most point toward a mid-cycle environment rather than a late-cycle one.

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Duration and relative valuation raise some concerns, but these are just one or two of nine indicators. Everything else suggests the bull market has not yet reached its final, most speculative phase.

In other words: this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

$8 to $10,000 by the end of the decade is a very real possibility.

Thanks very much for being a subscriber to Flying Frisby.

Until next time,

Dominic

PS I have discussed gold largely in dollar terms, because the market is quoted in dollars. But if you are in the UK the case for owning gold has less to do with the dollar and far more to do with the pound. Sterling has already lost roughly 40% of its purchasing power since 2020, and that trend is not going to reverse. If anything it will accelerate. It’s not just the ineptitude of successive governments, but unelected permablob (in this case the Treasury, the OBR, the Bank of England, the FCA et al) that actually runs the show. The system- if you can call it that - is the problem and it’s not going to change. The incentives are to spend more, borrow more and debase the currency slowly over time. You cannot fix that system. But you can protect yourself from it. And that means owning some gold.

Disclaimer

I am not regulated by the Financial Conduct Authority (FCA) or any other regulatory body as a financial advisor. Therefore, any information provided in this newsletter does not constitute regulated financial advice. It is solely an expression of opinion. Small-cap stocks are inherently risky. Please conduct your own due diligence and consult with a financial advisor, if you have any doubts. Remember, markets can both rise and fall, especially in the case of small and mid-cap stocks. I am not aware of your individual financial circumstances, so only invest money that you can afford to lose.

Good Sunday to you,

You’ve no doubt seen the videos of Iran’s largest oil facilities burning.

How much destruction does war cause? To the environment, to wealth, to people’s lives.

And governments lecture us about the environment.

15% of China’s oil comes from Iran. Not any more. I bet they’re delighted.

No surprise, oil futures have spiked again. WTIC has gone to $94 in weekend markets, Brent to $97.

I’m glad we own oil and I’m glad we own gold.

Iran meanwhile has started targeting desalination plants across the Middle East - how most neighbouring Arab nations get their water - and the probability of an early end to this conflict, despite Donald Trump already claiming the win, seems to be receding by the day.

According to Polymarket, the probability of a US-Iran ceasefire by March 31 is just 24%. Even by the end of April it is just 48%. The odds are 67% that the Iranian regime will still be in power by June 30.

Meanwhile, in the UK, the strategic stupidity of being dependent on overseas sources for oil, gas and coal when we have perfectly abundant supplies of our own is about to hit home in the form of yet higher energy costs. The government will no doubt blame everyone and everything but itself.

UK borrowing costs are now rising faster and higher than any other European nation, which spells trouble for the housing market, business and the economy, and government finances. Ten year gilt yields are now above 4.5% and it costs more for the UK government to borrow than it does any other G7 nation, and indeed any PIIGS nation, which became such laughing stocks after the GFC.

Happy days.

Here’s a five-year chart of gold priced in pounds, in case you were wondering what a trend looks like. There’s only one way this is going.

You can look at a 10- or 20-year chart. It’s the same story.

Here also for your reference is a long-term chart (since 1983) of the gold-oil ratio.

You can see how cheap, historically, oil is.

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And that’s even after the rally of the last fortnight.

What if it goes back to the top of that range?

I’m glad we bought oil when we did, before this all kicked off. As always when a market moves in your direction, I now wish we’d bought more.

Here is this week’s commentary, in case you missed it. Lots of forecasts for the year ahead. Take a look if you haven’t already seen it.

Thank you for being a subscriber to the Flying Frisby.

Until next time,

Dominic

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War creates uncertainty. Lots of it. And how we all hate uncertainty.

Markets don’t like it either.

What’s going to happen? How long does it go on for? Where do things go from here?

Iran will be an in-and-out job like Maduro. Actually the regime is more entrenched than that. It’s only going to last four weeks. America’s preparing for a 100-day war. Britain is getting dragged into World War Three. It’s Cuba next. Aaaagh. Help.

At times like this it pays to zoom out and take stock of the bigger picture.

So today I’m going to do that.

With a BIG Forecast.

I’ve studied the charts, applied some simple technical analysis, all with a striaghtforward question in mind: where is all this going?

We are going to look at:

1. Gold

2. Silver

3. Bitcoin

4. Crude oil

5. Copper

6. The S&P 500

7. The pound

8. The US dollar

And I am going to give you my forecast.

Before we begin, though, take a moment.

Where do you think these markets will be by the end of the year?

• Will gold be higher or lower? What about silver?

• Will Bitcoin break $150,000 or fall back below $60,000?

• Will oil go to $100 a barrel?

• What about the stock market?

• And the pound?

Make a note of your answers.

Now let’s see how they compare with mine.

Gold

$4,400 low / $5,600 high by 31 Dec 2026

Gold bull markets don’t last forever, but they do tend to last a decade, if the last 60 years are anything to go by, and we are midway through this one. Chinese accumulation is not over, de-dollarisation is not over, central bank re-allocation is not over. Institutions, governments and private investors are still underweight. About the only group that isn’t underweight is readers of the Flying Frisby.

We are currently experiencing a mid-cycle consolidation, much as we experienced in 2006: gold went vertical from $540 to $720 then fell back and traded sideways, with an upwards bias for the next 18 months. Five years later it was $1,920.

My forecast: gold range trades. $5,150 is the current price. Gold will flirt with its old highs at $5,600. It will test $4,500 as well. Buy the dips. It’s going higher. Just not quite yet.

For the mining companies to work, gold only needs to stay around these levels. The GDXJ-gold ratio - small mining companies v gold - is in an uptrend, though it’s butted up against resistance and the 2020 highs. It can go a lot higher, though maybe it needs a breather.

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Silver

It’s the one everyone wants to know about.

Silver is basically a leveraged bet on gold plus industrial cyclicality. It can underperform brutally and it can overshoot like crazy too.

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Yesterday, the US and Israel launched a joint attack on Iran, targeting key military and other strategic facilities. The Ayatollah Khamenei - supreme leader of Iran for 36 years - has already been confirmed dead, killed in the strikes along with several other senior officials.

In retaliation, Iran has struck US military bases, Israel, and targets across the Middle East. Supposedly safe Dubai has been hit.

We pray for every innocent caught up in this, wherever they are.

We have a major conflict in the Middle East on our hands. Again.

The early signs

This operation was reportedly planned for months and rumours about its imminence have been circulating for as long.

President Trump has promised to obliterate Iran’s nuclear programme and end the regime.

Many Iranians have been pictured celebrating in the streets. This regime was massacring protesters only last month. Iranians may not mourn its end.

The succession question seems open. One hopes Israel and the US have plans in this regard, but, with no vice-supreme-leader position, there is bound to be something of a power vacuum, even if a three-person council has temporarily assumed power.

The US-Israeli intention may be for this conflict to be swift and decisive, but the pattern of US warfare, as long as I can remember, is that it scores big, decisive victories early - so convincing that you think it will be a walkover - and then the enemy regroups, and the conflict drags on far longer than anyone hoped.

The nature of the military industrial complex, and how it is funded, means the incentive is rarely to wrap things up quickly, I am sorry to say, and that might have rather a lot to do with this repeating pattern.

We don’t yet know how this one ends, but the US already has a typically big early score with Ayatollah Khamenei now dead. I really would not be surprised to see the rest of the pattern repeat.

What happened last time

You’re no doubt wondering what the effect of this will be on prices and the answer is: perhaps not what you expect.

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