➡ The article discusses various market trends, including potential tariffs on copper, the performance of Bitcoin, and the status of Palladium and Platinum. It also mentions a merger between Dolly Varden Silver and Contango ORE, which is expected to bring synergies and extend their business plan from five to twenty years. The merged company will have about $100 million in the bank and will generate an average of $100 million of free cash flow from one of their projects, Moncho. The merger is seen as beneficial due to the similar nature of their projects and the large amount of land they control for exploration.

Silver continues to rally sharply while gold grinds higher, and lease rates explain why. According to the analysis, gold lease rates have turned negative, signaling easing physical stress, while silver lease rates are rising again, indicating tightening supply. Strong COMEX silver deliveries, persistent warehouse drawdowns, and renewed willingness to sacrifice dollar yield to secure metal all point to a more acute physical shortage in silver. Welcome to the Morning Markets and Metals with Vince Lancey, where each morning Vince brings you the financial and precious metals news to get you ready for your day. And now, here’s Vince.

Good morning everyone. I’m Vince Lancey. This is the Golfix Market Rundown. It’s 8.05. Today we’ll be talking about a recipe for a silver squeeze as measured by lease rates, and we’ll be touching on a little bit of CPI stuff as well. Anyway, let’s start with the markets. 10-year yields are down 2. The dollar is up 10. The S&P 500 is up 16. The NASDAQ is up 136. The VIX is down 20. Gold is 4317, down 21. Near its low is silver. Also near its low is 6582, after being up substantively before. All the moves right now are pre-data jitters.

Data doesn’t matter anymore. Just an opportunity for entry or exit. Copper, 531, down 2 cents. WTI, down 71 cents. Natural gas, up 8. A little bit of an echo. Bitcoin up 1300, nowhere. Ethereum up 48. Palladium up 24. Platinum up 3 and change. Gold silver a little over 65.5. Grains are mixed with corn up a penny. All right, so here we go. Last night in the Golfix PM post, we put a little bit of a comment about silver lease rates and squeeze as paraphrasing work by Simon White on zero hedge. Silver continues to rally sharply while gold grinds higher and lease rates explain why.

According to the analysis, gold lease rates have turned negative, signaling easing physical stress, while silver lease rates are rising again, indicating tightening supply. Strong COMEX silver deliveries, persistent warehouse drawdowns, and renewed willingness to sacrifice dollar yield to secure metal all point to a more acute physical shortage in silver. The divergence suggests structural stress as opposed to speculative excess. That is what’s driving silver’s outperformance. Now, a quick comment about lease rates. The chart that you’re looking at there, the top right-hand side, might be too small on your screen, but this is what we have right now.

Lease rates are nowhere near as high as they were before, okay? So you may be saying, well, lease rates aren’t really telling me that we’re in a short squeeze. Now, lease rates predict a short squeeze. Lease rates go up before price goes up if it’s a physical price. So when you look at the market and you say, well, if it’s not really a high lease, why is silver $65, $66, $67? That’s because there is no metal. So the squeeze isn’t over. Look at it like we’re in a chronic supply shortage that’s going to have flare-ups every so often.

So it’s a rolling squeeze as we opined last week. And now, because the market’s aware of it, it doesn’t take much to get the market freaking out a little bit more, which means it’s going to be spoofed higher, probably, going forward. Anyway, that went out yesterday. At the end of the day, we had like seven stories yesterday, so we had to put that one on the back end. And you can get that at the Goldfix PM. Today, in the Goldfix PM, we’re going to break down a report by Albert Edwards. Sock Jen is talking about recession in that context.

I think they’re picking up where the BIS, you may remember last week, the BIS put out a post saying that gold and stocks are in a bubble. He’s picking up where that left off, and he asks if precious metals are revving up for a 1980s-style blow-off top. And his conclusion, spoiler alert, is no, they’re not. And he goes through various reasons, pushing back on the BIS assessment. It’s a good piece, and he writes very well. But we don’t write as well as him. But there’s some good quotes in there, JP Morgan, et cetera, et cetera.

It’s a nice little piece. News and analysis, this is what we put out yesterday. CPI prep. It’s supposed to come in pretty much steady, but maybe a little bit higher because of maybe tariffs are starting to have a little bit of an effect. Anyway, there’s really not. I mean, there’s a lot going on here, right? Okay, but we’ve talked about all of it ad nauseam, so let’s move on. Data on deck, that’s CPI, tomorrow’s existing firm sales. We do want to just fill the gap here because we’ve all had our, at least I’ve had my head buried in metals for the last six months.

So time to start looking at regular news again. So these three stories, I think, are important in the context of the whole economy and whether we’re spending or not. I think one of the phrases Albert Edwards uses when he’s talking about if gold’s in the bubble or not, he talks about the economy as being fiscally incontinent. So basically, they don’t know how to stop spending. So with that phrase in mind, with that turn of phrase in mind, there are three stories we think that are relevant. Trump defends handling of the economy, announces military dominance.

So he intends to give checks, not tax breaks. He intends to give checks to military personnel. He defended his economic record in a prime time address, unveiled a 1776 warrior dividend for around 1.45 million service members, and said he’ll soon name a Fed chair who backs big rate cuts. That’s the Wall Street Journal. The second story that we thought was interesting, that’s interesting because they’re just spending money. It’s a chicken in every pot. Midterms are coming up. I guess he can’t give $2,000 checks to everyone, but he can give them to soldiers.

All right, number two, all that cheap Chinese stuff is now Europe’s problem. US tariffs on cheap Chinese imports have rerouted low value goods into Europe, boosting Chinese e-commerce shipments and challenging European retailers and policymakers. That’s interesting. So China is finding someone else to buy their low-end goods, their crap, stuff that we buy. So let’s see how that works out for Europe, trying to rebuild its economy. But now they’re just buying stuff from China. So we’ll see how that works out. Trump says next Fed chair will back big rate cuts. Trump said he’ll soon announce the next Jerome Powell successor as Fed chair, insisting the pick will strongly support lower interest rates to ease mortgages.

Lower interest rates are not going to ease mortgages. I mean, they’re going to make them back off a little bit, but they’re not. You’re going to go back to the days of the 70s, remember? Fed funds are here, but the prime rate is 9%. The prime rate is going to be something that people talk about again. Take a quick look at the charts. The daily charts, 10-year yields. 10-year yields have broken out technically of a downtrend, but now they’re possibly back in it depending on where you draw the line. So keep in mind that the QE or not QE that Powell is doing is QE.

And it’s because it’s all about the 10-year bonds. It’s not about stocks. It’s about the 10-year bond. And apparently, according to zero hedge, and I’m laughing because it’s here we go again, they assert that the bailout or the easy money is to rescue once again, J.P. Morgan, you know, the systemic bank that’s too big to fail, that keeps saying, well, if I’m too big to fail, I’ll just be stupid with my money. And that’s what they’re doing. The Fed is, I haven’t read the whole story yet, but I’m familiar with it from 2019 when they covered it initially.

They covered it well and no one believed them, but that was right. So it’s always J.P. Morgan behind the curtain. No matter what market it is, right? Bonds, metals, who knows, but that’s the anti-year yield. The dollar, looks like it’s in a range. Could work its way down to 96.5, but I don’t see it right now. S&P 500, it’s always the S&P 500, right? I mean, there it is. I mean, that’s a market that’s been topping for five years. NASDAQ, but below moving averages now, right? So now you’re looking at people that probably are going to be looking, trapped loans will look to sell strength as the moving average is approached.

The VIX, the VIX never stays up, but it’s basing at much higher levels than it used to be. This used to base it like 12 and 13. Gold, there’s your trend. There’s your panic. There’s your trend. There’s your trend. It’s right there. Nothing to worry about there. Not gold, what? Here’s your trend in silver. There’s your get it. There’s your get ahead with gold. There’s your silver all by itself. Copper. This is a very volatile going nowhere thing. You know, I asserted a couple weeks ago that when we get enough copper cathodes in, Trump’s probably going to throw the tariffs up again.

And Goldman has a report out to that effect today. So I’m going to take a look at that. No, it’s quite possible that that copper will be tariffed to the point where it spikes a lot higher. But you know, until that just something to keep in mind, WTI cannot get out of its own way. Natural gas. Yeah, that’s that’s an echo. I wouldn’t call anything to worry about. Bitcoin. Bitcoin is the new gold. It’s, you know, just it sells off even when it rallies. Ethereum. Palladium. That’s interesting. OK, so it looks to me like there may not be a squeeze in Palladium or Platinum yet.

But if you’re getting killed in silver and your boss taps you on the shoulder and says, hey, Joe, aren’t you sure Palladium too? Yeah, cover it. That’s what’s happening right now. Platinum. I think there is a problem right now. Gold, silver, 65. That’s great. We’re a long way from 90 when we call this or when we handicap this. Let’s say that. And grains. We’re not going to cover the grades right now. All right. I’m Vince. Have a great day. Well, thank you, Vincent, as always for this morning’s show in the midst of truly stunning times in the gold and silver markets.

And thank you for joining us and watching at home. Sure is a pleasure to be here with you each day and increasingly having a lot of fun in the chat that happens during the live debut of Vince’s show every morning at nine o’clock. So you usually watch later in the day. Come join us sometime at nine a.m. and have quite a good time here following the latest activities as we see history made on an almost daily basis this year. So anyway, before we wrap up and start to get ready, only a week away from Christmas now, but didn’t want to pass along that today’s show was brought to you by Dolly Varden Silver.

And of course, Dolly Varden had a merger that they announced last week with Contango ORE and to talk a little bit more about the deal. And here is Rick Van Neuwenhuis of Contango ORE and Sean Kunken talking about their thoughts on the deal. It’d be great to hear from your perspective the synergies and what led you to this point. Yeah, so I mean, I’ve known Sean for, I think we’ve known each other probably 10 years, followed. I mean, it’s interesting. He joined Dolly Varden about the same time that I joined Contango. And so we’ve, you know, we’ve respectively built our companies here in, you know, in what was a tough market for a lot of years.

And so from my side, I’ve been impressed with what he’s been able to accomplish in a fairly short period of time and focused on, from my perspective, focused on the high quality nature of the deposits, both, you know, Homestake and the Dolly Varden and Torbrit. So those are, and being able to move them along, attract the capital and again, in a tough market to accomplish what they’ve accomplished. You know, from our side, we just, when we had the million ounce deposit at Moncho, we faced a decision. Do we, do we go where raise the money to put this into production for ourselves? This money, first year of COVID, things were quite dysfunctional.

And it was obvious to me that, yes, we could probably do that, but it was not be rewarding for shareholders. Yeah, we could raise the money. We could raise the four or $500 million to build our own mill slog through the permitting process to, you know, permit a tailings facility and all that. And, but we said, there’s excess capacity at the Fort Knox mill. Let’s go talk to those guys. Let’s work out a deal. And, and yes, we gave up 70% of the project, but we got it, we got it into production in, in three years.

And, and that’s cash loan to me, cash flows, the, that’s the, that’s the primary thing you need in, in any business, but certainly in the mining business, because it takes everybody to cash to do what we do. So we got into production. And we, we saw that we, we referred to it as a direct shipping or a model because we didn’t build a mill. We didn’t build a tailings facility. We didn’t all that stuff. We just took advantage of existing capacity at Fort Knox and got, got that done quickly. We said, okay, let’s, let’s go look for more opportunities like this.

We, we, we did a deal on our lucky shop project. We’re now underground drilling there to define a half million ounce resource and put that into production. It’s a historic mine. It produced a quarter million ounces at 40 grams per ton. We’re going to, we’re not going to mine like they did a hundred years ago. We’re, you know, we’re using modern mining safe, modern mining methods. So we’ll have a grade probably closer to 10, but that’s still plenty of grade to send up to the Fort Knox mill, put it in the truck, haul it down to the railroad and take it up to Fort Knox.

And then we have our Johnson track project. Again, it’s very, it was very much like, like the Montreal project, a million ounces. And we see the ability to execute this direct shipping or model for Johnson track. And that’s where the real synergies with Dolly Varden come in because Johnson track, it’s a high grade deposit. It’s a, it’s over nine grams per ton, gold equivalent. It is gold, silver, copper, lead and zinc. Those are the same metal mix that Dolly Varden is. And so we can put those two projects together. And as Sean referred to, I heard him say earlier, we’ve gone from a five year plan to a 20 year plan.

And that’s fundamentally what the merger does. And it does it with a hundred million dollars when the merger happens. We’ll have about a hundred million dollars in the bank. We’ll have a, we’ll be generating a hundred million dollars of free cash flow on average from Moncho. And then that’s plenty of money to continue to advance all three of our other projects. And I think I heard Sean referred to them as districts and that’s what they are. They’re large land positions. Collectively, the four districts that we’re operating in have half a million hectares of land to explore that we control in the, in the company that we will control when the company is combined.

That’s a phenomenal amount of a prospective ground to explore. So yeah, I’m, I’m really excited about this merger. Just, it, it’s just makes sense. A lot of mergers don’t make sense, you know, a company with a producing mine in Nevada, you know, coming together with a company producing, with a producing mine in Nunavut, there’s no synergies there. This is, this, this merger is just loaded with synergies. Well, thank you to Rick and thank you to Sean and congratulations on the deal. And in case you missed that call to see the full thing and learn about one of the recent M&A deals in the solar space in the midst of this historic rally, well, that one is coming your way now.

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