If you're bullish on gold and silver mining, it's time to BUY BUY BUY.

Gold was the best-performing asset class in 2024, far outpacing precious metal stocks. 

We wouldn't be surprised to see the mining stocks catchup in 2025. Why?

Sector rotation is the lifeblood of a bull market. 

This chart suggests it's time for some mean reversion 👇

The commodity bears are going into hibernation.

Today was the best day in years for commodities relative to stocks and bonds. 

Inflation expectations are hitting a fresh 30-month high, with crude oil's price breaking out to 10-week highs.

We think this is the beginning of a much longer period of commodity outperformance.

A few weeks ago, we told you a big move in the energy markets was coming. We think this recent price action has marked the beginning of that move.

In addition, we outlined why we're buying copper futures last week, and so far, that trade has been a home run.

What's next?

People keep telling us, "2024 was the year of artificial intelligence." 

That's bull shit, and we have the data to prove it. Last year was a year for the gold bugs. 🥳

Here's an overview of how each asset class performed in 2024:

Did you know China outperformed the United States stock market in 2024? We have the data.

We think this relative strength will persist, and if that's the case, don't forget about copper!

We discussed the long-term positive correlation between Chinese equities and copper futures a few months ago. 

Why does this relationship exist?

China is the world's largest consumer of refined copper and accounts for over 50% of global consumption. 

If one is going to work, so will the other.

More importantly, copper futures are testing a key level of interest:

Silver relative to gold is the best intermarket ratio for precious metal investors to track.

The line goes up when the animal spirits are alive in the industry.

Earlier this year, the ratio broke a multi-year downtrend line. 

It looked poised to retest the neckline of a massive head and shoulders bottoming formation.

Instead, it's been a choppy mess in recent months, disappointing the gold bugs (including ourselves).

You need to see this zoomed-out chart of silver relative to gold:

Crude oil is setting up for a big move, and almost nobody is paying attention. In fact, sentiment in the energy trade couldn’t be more bearish right now. Everyone hates it, everyone. 

As Strazza said on our call yesterday, “Even Warren Buffett is losing money on this one.” That’s the vibe.

XLE keeps dropping, the bearish sentiment intensifies, yet producers are stepping in and buying. That’s a bullish signal if I’ve ever seen one.

The market just had a stress test, and gold passed it.

Now, what's next?

We've been monitoring the strength of the United States dollar, which has added to the selling pressure on gold. 

First, check out how helpful this intermarket relationship has been recently:

Mr. Market keeps sending us inflationary signals. Have you noticed?

Last Friday, we talked about cattle futures potentially leading bond yields higher. 

Boy, was that the case this week as bond yields soared on the heels of an FOMC meeting.

We've also talked about a rotation into the energy sector, which has been in the penalty box for most of this bull market.

Newmont Mining has been a bellwether of the gold mining industry for decades, producing thousands of ounces yearly.

It's also the largest component in the gold miner ETFs like GDX and RING. As Ron Burgundy said, "I don't know how to put this, but I'm kind of a big deal."

Over time, the company has been mismanaged and desperately needs a makeover. 

Just look at Newmont Mining flirting with new all-time lows relative to gold:

President-elect Donald Trump rang the bell at the New York Stock Exchange this week, and it was reminiscent of the times when Ronald Reagan and George W. Bush went to the NYSE years ago.

The infamous Reagan quote, "We're going to turn the bull loose," immediately came to mind.

Considering that, it seems appropriate to talk about bulls today because of their positive correlation to economic growth.

Live cattle futures and bond yields have danced together for decades:

Several months ago, we discussed the blowout momentum readings for the junior gold and silver miners.

These momentum thrusts often initiate the beginning of significant trend reversals, not the end.

Since then, the price action has been lackluster. However, our technical analysis suggests that the bulls are on the cusp of stepping in and resuming the primary uptrend.

Let's delve into the charts and how we plan to profit from them.

Silver Miners $SIL are printing fresh 52-week highs relative to silver futures:

The New York Stock Exchange held its annual Tree Lighting Event this week. It was spectacular, as always.

But we're not here to talk about pine trees or LED lights. We're here to talk about commodities.

The NYSE has an array of vehicles to trade, most being equities.

They also have several commodity funds, which happen to offer asymmetric risk versus reward opportunities at current levels. Let's talk about them.

Our first setup is the Invesco DB Agriculture Fund $DBA: