From Euphoria to Evaluation: What January’s Precious Metals Surge Leaves Behind

• Precious metals posted historic monthly gains in January 2026, with silver surging past $120 and gold exceeding $5,100 before experiencing a modest correction, representing potentially the best monthly performance on record following 2025's record-breaking year.
• Market sentiment at Vancouver conferences reached levels not seen in over a decade, with significantly higher attendance, increased retail participation, and exploration companies reporting over 150 investor visits per booth, indicating substantial capital inflows into the sector.
• Private placement activity surged dramatically, with companies completing $20-25 million financings and institutional investors writing substantially larger checks than in previous quarters, reflecting strong 2025 performance and capital rotation into mining equities.
• Despite overbought technical conditions (RSI in the 90s), fundamental drivers remain intact, with industry leaders viewing recent price action as excessive in pace but not signaling an end to the bull market, with gold potentially higher by year-end despite near-term consolidation.
• Mining equities remain undervalued relative to commodity prices, particularly developers and explorers, with Q1 2026 earnings expected to show significant margin expansion as producers benefit from $700+ quarterly increases in gold prices flowing directly to bottom lines. 

Olive Resource Capital executives Derek Macpherson (Executive Chairman) and Samuel Pelaez  (President, CEO, and CIO),discuss a pivotal moment in precious metals markets as gold and silver experienced historic gains throughout January before encountering a correction in the final days of the month. Despite the pullback, precious metals were positioning for what the executives described as potentially the best monthly performance on record, building on 2025's already exceptional year.

The timing of the recording proved significant, as markets were experiencing real-time volatility. Macpherson had recently returned from Vancouver, where he attended the Vancouver Resource Investment Conference (VRIC) and presented at the Metal Investors Forum. His on-the-ground observations provided insights into shifting market sentiment and capital flows within the mining sector.

Historic Price Performance in Context

By Friday morning of the final week of January, silver had just surpassed $100 per ounce, while gold had not yet crossed the $5,000 threshold. The momentum continued through the weekend, with silver pushing through $120 and gold exceeding $5,100 before the correction materialised. Pelaez characterised these moves as significant advances beyond major psychological round numbers on a benchmark basis.

The executives acknowledged that the rate of ascent appeared unsustainable, a sentiment echoed by several prominent industry figures. Ross Beaty, in an interview conducted during VRIC, expressed measured concern about exuberance in the market, particularly regarding silver. Beaty noted that silver's industrial applications could face demand destruction or metal substitution if prices continued their rapid climb. Similarly, Rick Rule indicated during his conference presentation that he was taking profits given the prevailing market conditions.

However, both Olive Resource Capital executives emphasised that technical overbought conditions do not necessarily signal an imminent reversal. Pelaez noted that while relative strength indicators for gold and silver had reached the 90s range levels rarely achieved by any asset class such conditions can persist for extended periods. He drew a distinction between oversold conditions, which typically present clear entry points, and overbought conditions, which do not reliably indicate optimal selling opportunities.

Shifting Market Sentiment at Vancouver Conferences

Macpherson's experience at Vancouver conferences revealed a dramatic shift in market participation. Attendance levels exceeded anything witnessed in the previous decade, with a notable increase in both sophisticated institutional investors and retail participants. The executive observed numerous unfamiliar faces, suggesting new capital entering the sector, a pattern first noticed at the Beaver Creek conference months earlier but now more pronounced.

One exploration company reported receiving over 150 investor visits to their booth on Sunday, traditionally the busier day at VRIC. This occurred despite the company being a small-cap explorer without significant brand recognition. The contrast with previous years was stark; Macpherson recalled conferences where companies effectively pitched to neighboring booths rather than engaging with actual investors due to sparse attendance.

The surge in investor interest translated directly into capital markets activity. Private placement volume increased substantially, with multiple firms working on numerous deals exceeding $20 million daily. Pelaez cited West Point Gold, where he serves as CEO, as an example. The company's financing was initially planned for $20 million but was upsized to $25 million due to exceptional demand. Investment bankers and sales professionals confirmed they were managing multiple concurrent transactions of similar scale.

Institutional Capital Deployment Accelerates

A significant development highlighted by Pelaez involved the evolution of institutional participation. Comparing subscriber lists between a June 2025 financing and the January 2026 transaction for West Point Gold revealed that many of the same institutional investors participated in both rounds but with substantially larger commitments in the recent deal. This pattern reflected the strong performance many investment funds achieved in 2025, which generated additional capital available for deployment as portfolios were rebalanced.

The executives viewed this trend as particularly positive for the sector's development. Larger capital allocations enable companies to undertake more transformative projects and advance development programs more aggressively. The availability of growth capital at this stage of the commodity cycle creates conditions for meaningful corporate progress rather than mere survival financing.

Interpreting the Recent Market Correction

Both executives addressed the correction occurring as they recorded, emphasising they did not view it as signaling the end of the bull market. Pelaez stated that underlying fundamentals driving gold, silver, copper, and other commodities remained intact. The price action had simply moved ahead of what he termed "reasonableness" in the near term.

During Olive Resource Capital's investment committee meeting on Wednesday, the team discussed whether gold would be higher at year-end from current levels. The consensus affirmed that view, based on persistent fundamental drivers. However, the executives distinguished between long-term directional conviction and expectations for near-term price velocity, acknowledging that January's pace was unlikely to continue linearly.

Macpherson noted that the anticipated equity market pullback, given soft metal prices on Friday morning, would likely present buying opportunities for investors who felt they had missed the initial rally. He acknowledged the irony that by the time the episode was published, such opportunities might have already materialised and passed over the weekend.

Macroeconomic Backdrop Remains Supportive

Pelaez provided context on broader market conditions supporting the precious metals thesis. Global liquidity continued expanding, albeit at a slower rate than previously, and remained at all-time highs, a supportive backdrop for risk assets and commodities. Traditional indicators of market stress, including option-adjusted spreads and high-yield bond markets, showed no signs of elevated volatility or systemic concerns.

This macroeconomic assessment reinforced the executives' view that the recent price action represented a necessary retracement of an overextended move rather than a trend reversal. The correction appeared to be a consolidation within an ongoing positive trend rather than a fundamental shift in market direction.

Mining Equity Valuations Relative to Metal Prices

Pelaez provided detailed analysis of mining equity valuations relative to commodity prices, arguing that developers and explorers had not yet reflected $5,000 gold in their valuations. While producer equities had begun incorporating higher metal prices, he contended they had not become materially more expensive on cash flow or EBITDA bases. The sector continued lagging the S&P 500, suggesting additional upside potential.

The executive emphasised that mining equities retained room for appreciation even if gold prices stabilised at current levels without further gains. This perspective stemmed partly from anticipated first-quarter earnings reports. Gold prices averaged approximately $3,600-$3,700 in Q3 2025 but $4,300 in Q4 a $700 per ounce quarterly increase that would flow directly to producers' bottom lines.

For a company like Kinross, producing approximately 2 million ounces annually (500,000 ounces quarterly), this $700 increase translates to $350 million in additional quarterly earnings. With gold prices starting Q1 2026 around $5,000 another $700 premium over the Q4 average similar margin expansion would be evident in upcoming reports. Pelaez anticipated that strong earnings could drive equity appreciation even if metal prices experienced softness, provided gold maintained the $5,000 level.

This dynamic applied equally to silver producers and platinum group metals (PGM) companies, though PGM producers typically report semi-annually, making the commodity price changes since their last reports (Q1 and Q2 2025) even more dramatic.

Anticipated Earnings Impact from Higher Realised Prices

The executives discussed their investment approach, emphasising their identity as fundamental rather than technical traders. While they monitor chart patterns and technical indicators, capital allocation decisions derive primarily from fundamental analysis. Pelaez explained that identifying precise entry points involves judgment informed by continuous market observation rather than mechanical formulas or predetermined price targets.

Macpherson noted that on Wednesday, with metals at peak levels, the firm was not adding precious metals exposure. However, if significant pullbacks materialised, particularly in favored names, the team would actively evaluate opportunities. This flexibility characterised their approach, maintaining conviction in the long-term thesis while remaining tactical regarding entry points and position sizing.

The executives acknowledged that Fridays typically exhibit weakness as market participants reduce risk exposure before weekends. However, the firm maintained capacity to participate in any aggressive selling that might develop throughout the trading day.

Looking Ahead: Upcoming Catalysts and Topics

Macpherson mentioned several items that would be addressed in subsequent episodes. The announcement of a new Federal Reserve chair warranted analysis, though he had not yet fully formulated his perspective on its implications. Additionally, news developments at several portfolio companies would be discussed in upcoming content. The executives committed to establishing a more regular publishing schedule as the year progressed.

Robert Friedland's comments at the Davos conference earlier in January also merited attention. Though focused on copper rather than precious metals, Friedland characterised the current environment as "the revenge of the miners" and described the industry as standing "at the foot of Everest," suggesting substantial gains remain ahead. Multiple sophisticated market participants shared this view of a potentially long-lasting bull market in commodities, though with expected volatility creating periodic opportunities to add positions.

Key Takeaways for Investors

The discussion revealed a sector experiencing historic price appreciation while simultaneously attracting substantial new capital from both institutional and retail sources. The correction occurring as the executives recorded appeared to represent a healthy consolidation rather than a fundamental reversal, with underlying drivers including global liquidity expansion, geopolitical factors, and supply constraints remaining supportive.

Mining equities, particularly in the development and exploration categories, had not yet fully reflected elevated commodity prices, presenting ongoing opportunities despite the strong performance already achieved. Upcoming earnings reports were expected to demonstrate significant margin expansion, potentially driving further equity appreciation even without additional commodity price gains.

The executives maintained conviction that the bull market in precious metals and broader commodities possessed characteristics of a generational opportunity, with fundamental drivers intact despite near-term overbought technical conditions. Their investment approach balanced this long-term conviction with tactical flexibility to capitalise on volatility and correct positioning as market conditions evolved.

TL;DR: 

Olive Resource Capital executives discussed precious metals markets during late January 2026's historic rally and subsequent correction, with gold exceeding $5,100 and silver surpassing $120 before pulling back. Despite overbought technical conditions, fundamental drivers remain supportive for continued gains, while mining equities particularly developers and explorers have not yet reflected $5,000+ gold prices, presenting ongoing opportunities. Vancouver conferences showed unprecedented attendance and capital flows, with private placements routinely exceeding $20-25 million, indicating sustained institutional interest that should support sector growth throughout 2026.

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