Olive Resource Capital Sets Cash Ahead of Seasonal Fed Buy Window

• Olive Resource Capital has deployed only about 5% of a cash balance while the rest is held back for a better seasonal entry point.
• The principals see the US midterm result as largely priced in where commodities other than crude oil have traded flat, the US dollar remains strong, and volatility has been lower than they expected.
• Copper may see a short-term soft spot as US inventory, built up on the threat of tariffs, runs down as market remains in a slight supply deficit this year, and the long-term fundamentals are unchanged.
• The next Fed meeting is the fund’s timing marker because its date has historically coincided with the seasonal bottom after tax-loss selling.
• Olive is looking to add energy exposure while peace talks on Ukraine and Iran pull oil lower and structural demand to keep a floor under prices.

Olive Resource Capital (TSXV:OC) has put roughly 5% of its cash balance to work since its last Compass episode. It is holding back the rest for a seasonal entry point that its principals link to the next US Federal Reserve (Fed) meeting. The episode was recorded on November 11, 2026, around noon Eastern time. It followed the US midterm elections and a hot inflation print, at a time when peace talks on Ukraine and Iran were pulling crude oil lower.

Executive Chairman Derek Macpherson and Samuel Pelaez, President, CEO and CIO, said the election result has not changed their view on commodities. They described a “blue tsunami” that has so far added less volatility than expected. They also pointed to a rotation out of artificial intelligence (AI) stocks that historically supports gold, and to an oil pullback they see as a chance to add energy exposure. The fund reported a cash balance that Macpherson called sizable for this time of year. The tax-loss shopping list discussed on the prior episode remains largely unfilled.

Midterm Results & the Market Reaction

The episode opened on the midterm results. Macpherson said they gave Democrats the House, the Senate and a number of governorships. He read the outcome as a referendum on the economy, pointing to high prices, elevated diesel costs that feed into everything else, and wages that have not kept up with the cost of living.

Pelaez placed the result inside a long historical pattern. Almost every sitting president loses a large number of seats at the midterms, and the six months that follow have tended to be strong for the stock market. Macpherson added that the losses are typically larger when a two-term president is in his final two years, as President Trump is now, and that the 37 seats lost this time are not unprecedented.

Pelaez said most of the outcome appears to have been priced in. Outside of crude oil, the commodity reaction has been flat, the US dollar remains strong, and volatility has been lower than he expected. The exception was aggressive selling in the AI sector, which he linked partly to factors beyond the vote.

Copper & the AI Capex Question

The election has dented one of copper’s demand narratives. The pair expect pushback against AI data center buildouts. The copper demand case built on AI capital spending now looks less certain than it did before the vote.

Pelaez argued the larger shift is in perception. The second Trump administration has been vocal in backing onshore metals production, supporting large development projects and taking equity stakes, including in Intel and in some junior mining development companies. He expects that support to continue, because onshoring is a bipartisan policy, but to weaken at the fringes. That means less direct government funding for projects and less incentive to hold up the aggressive tariffs that have supported specific metals.

Macpherson said copper is the clearest case. The threat of US copper tariffs drove a large inventory build in the US, and the metal could see a soft spot as that inventory runs down. He noted the copper market is again in a slight supply deficit this year and does not expect the longer-term fundamentals to change. In his view, possible reversals of permitting changes are not mission critical, although a Democratic president from 2029 could be a different story.

Precious Metals

Gold stands to benefit from the rotation out of AI equities. The hosts said money leaving a sector as large as AI typically moves into gold. They described the current selloff as an early sign that has historically been positive for the metal over the long term.

Pelaez tied the AI selloff to a gap between promise and delivery. In his view, the data center and capital spending ambitions presented to the market over the past 12 months appear hard to realize, because projects still require site permits, community support and new power plants. He said this realization is not a Democratic or Republican issue. Market perception is now closer to reality than it was before the election.

Macro Backdrop

The macro read was unchanged by the election. Macpherson said both Democratic and Republican Congresses are willing to run deficit spending, so the monetary side of the investment case is the same. The next event on the calendar is the Fed meeting. Following a hot consumer price index print, Macpherson said markets are pricing roughly an 84% to 85% probability of another quarter-point rate hike, with the policy rate around 3.75% to 4%.

Pelaez said the size of the move is less relevant than its timing. A 25 basis point increase is fully priced in, and he sees no room for a larger move. With US government bonds yielding about 5%, the transmission mechanism is already ahead of the Fed. He watches the date instead. The meeting has historically lined up with the bottom of the seasonal period after third-quarter tax selling. It has also lined up with the best time to buy ahead of the Christmas rally and the first quarter, which he described as the strongest seasonal period for commodities.

He is also tracking the US Dollar Index. On a technical basis, the dollar may have further upside. Because the dollar typically moves inversely to commodity prices, Pelaez said the sector may see more small washouts before the seasonal upswing resumes.

Positioning

The fund’s positioning centers on cash and oil. Macpherson said the hot inflation print fed through to weakness across the mining complex the day before recording, and that a session the previous Friday may also have offered an entry. Even so, he has not yet seen the conditions to commit a large share of cash.

On oil, Pelaez said expectations that the Trump administration could escalate with Iran around the midterms lifted volatility and crude prices. Most or all of that rise has since unwound. With the post-election push for peace in Ukraine and Iran pulling oil lower, he said Olive is looking for a window to raise its energy weighting. He stressed that this describes the fund’s own approach and is not a recommendation. Both hosts said they doubt the talks will produce lasting peace.

Executive Chairman of Olive Resource Capital, Derek Macpherson, said peace overtures have generally been good opportunities to add, and that the downside case of an actual settlement does not change the fund’s view:

“Our fundamental view on oil is that even if all of the conflicts resolve, there’s still structural issues. There’s still structural demand [that] is going to keep the oil price up here.”

Macpherson recalled that oil was one of Pelaez’s top commodity picks for the year, made before the late-February US missile strikes on Iran. He sees a price floor a little below current levels, not back to pre-war prices, and said the damage already done will be felt for some time.

Stock Selection Philosophy

Olive treats macro events as guide markers for timing. Macpherson said the fund does not wait for a specific event before acting, because a market positioned for a priced-in outcome can reprice quickly when the outcome changes. An investor who is not positioned can miss a 5% to 10% move the following day, and the window they were waiting for closes.

Conference season is under way, particularly in Europe. Pelaez said most companies he has met are well funded, but a minority face a difficult period as they try to raise capital before year end. He is watching that group for specific opportunities.

Pelaez described how that pressure is playing out on the ground:

“There’s a lot of companies that are well cashed up fortunately. There are a few that aren’t, and they’re going to be in a tough spot for the next two months as they try to replenish the funds into year end.”

Key Takeaways

Olive Resource Capital enters the final weeks of the year with most of its cash still available and a clear set of triggers for deploying it. The principals see the midterm result as largely priced in and their commodity views as intact. They expect deficit spending to continue under either party and the onshoring of metals production to survive the change in Congress.

The near-term picture differs by commodity. Copper may soften as tariff-driven US inventory runs down, even as the market stays in slight deficit. Gold stands to gain from capital leaving AI equities. Oil is under pressure from peace talks the hosts doubt will hold, and it is where the fund is actively looking to add.

Timing is anchored to seasonality. The next Fed meeting has historically coincided with the bottom of the tax-loss selling period, though a strong US dollar may produce further washouts first. Undercapitalized juniors needing year-end funding are on the watch list. On the next episode, the hosts plan to report on investor sentiment from the European conference circuit, including whether other investors see the selloff as a buying opportunity.

TL;DR

‍Olive Resource Capital has deployed only about 5% of its sizable cash balance since its prior Compass episode. Its principals see the next Fed meeting as the historical marker for the seasonal bottom in resource stocks, with a quarter-point rate hike already priced in. They view the US midterm result as largely priced in and their commodity views as unchanged. Copper may soften short term as tariff-driven US inventory runs down. Gold should benefit from capital leaving AI equities. Oil weakness on Ukraine and Iran peace talks is seen as a window to add energy exposure. Undercapitalized juniors facing year-end funding pressure are on the watch list.

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