New Year's resolutions: Resolved, resolving, and yet to be reckoned with

Personal New Year's resolutions seek to close the gap between where you would like to be and where you are currently. They resolve conflicts between current and aspirational health, budgets, and relationships.

Last year, we saw progress in resolving several conflicts in the commodity markets but believe more remain in 2026.

Progress made: Last year’s resolutions

There was a conflict in several commodities between a multi-year supply deficit and a failure to generate a corresponding price increase:

In 2025, all three of these metals produced above-average returns: silver up 148%, platinum up 128%, and palladium up 80%, respectively.³ These are impressive returns; however, with a very inelastic supply, the higher prices are not expected to affect supply in the short run. Supply deficits for all three metals – silver, platinum, and palladium – are expected to continue in 2026.

US battery electric vehicle (EV) sales fell 36% year over year in Q4 2025 following the end of the $7,500 tax credit in September.⁴ Ford, General Motors, and Volkswagen have all announced a shift toward more hybrid/gasoline-powered autos in lieu of EVs after the US EPA lowered mpg standards in 2025.⁵

This supports the strong in-demand story for palladium and, to a lesser extent, platinum, which are used in catalytic converter pollution-control systems in fossil fuel cars. This, while supply remains troubled. Platinum production from South African producers declined by 5% in the first ten months, while in Russia, Norilsk Nickel output was constrained by operational transitions.^6,7 And China having enacted a ban on silver exports starting January 1, 2025.⁸

With the US and China taking steps to control silver supply, some companies have followed suit. Samsung provided $7 million upfront to Coeur Mining to restart the La Parilla Silver Mine in Mexico, in exchange for 100% of the take-off rights for lead-silver and zinc concentrates for a two-year period.^9,10 Data that furthers the thesis for a strong silver market and a continuation of the market deficit.

Resolutions in motion

Presently, there are conflicts that have not yet been resolved in commodity markets.

Oil is priced in the $50s even while US inventories are low, just 19% above ten-year lows after a year-end uptick from the lowest values since the US shale revolution.¹¹ Additionally, the number of oil contracts owned by money managers is very near a 12-year low, implying portfolios are less hedged against an oil price rise than at any time since the US shale revolution in 2014.¹²

Owning oil when inventories are low and the market is underinvested has proven timely in the past, regardless of the fundamentals. This time, we believe there are reasons to own some oil exposure based on policy. The US has sanctioned and had recent military conflicts with Russia, Iran, and Venezuela – three oil producers that regularly supply oil to China. 

Harold Hamm, the billionaire wildcatter who helped kick off the US shale oil revolution, has said his company, Continental Resources, has halted production in the Bakken oil fields of North Dakota, and that all other fields are being evaluated with prices below $60.¹³ With that, our working assumption has been that below $60, US production becomes uneconomical, as we stated in a number of past monthly outlooks. In December 2024, we noted that the incoming administration's ”Drill Baby Drill” policy from its last term would not play out in a similar manner due to price dynamics.¹⁴

We believe it would likely take an overshoot of that $60 breakeven to get US production growing again, and simply returning to the average number of oil future contracts owned by money managers could add $5–$7 per barrel to the price. For these reasons, we see $75 as a target for WTI.¹⁵ This will undoubtedly put political pressure on the White House going into the mid-term elections, so we should expect more populist policies on affordability this year.

One of the most glaring is the credit card interest rate spread over the prime rate. Credit card issuers currently charge an average of 14.31% over the prime rate, vs. 5.14% in 2007.¹⁶ A return to average spreads would put the average credit card loan rate at 15%, much lower than the current 21%.

Conflicts still to be reckoned with

We continue to believe Graham Allison's 2017 book, Destined for War, is the geopolitical backdrop for our time. In that book, Allison describes the 600-year history of a rising power challenging an existing power, with 12 of the 16 cases ending in war. He concludes, as do we, that the US and China will not enter into military conflict but instead into co-opetition, cooperating on some issues and competing on others.

And with that, 2026 has started off with the US-China relationship heavily skewed toward competition:

Again, not indicating future US-China military conflict, but does emphasize that we are far from the total global supply chain of the 2000's. There are very real implications.

Endnotes

¹ "World Silver Survey 2025." Silver Institute, April 2025.https://silverinstitute.org/wp-content/uploads/2025/04/World_Silver_Survey-2025.pdf.
² "PGM market report." Johnson Matthey, May 2025. https://matthey.com/documents/161599/509428/PGM_Market_Report_25.pdf/.
³ Bloomberg data: 12/31/2024 to 12/31/2025: Silver, platinum, and palladium returns.
⁴ "Despite Q4 Collapse, 2025 EV Sales Decline Only 2% Versus 2024; Policy Shifts, New Product Set Stage for Next Chapter." Cox Automotive, January 2026. https://www.coxautoinc.com/insights-hub/q4-2025-ev-sales-report-commentary/.
⁵ "Fact Sheet: President Donald J. Trump Announces the Reset of Corporate Average Fuel Economy (CAFE) Standards." The White House, December 2025. https://www.whitehouse.gov/fact-sheets/2025/12/fact-sheet-president-donald-j-trump-announces-the-reset-of-corporate-average-fuel-economy-cafe-standards/.
⁶ Norilsk Nickel is a Russian nickel and palladium mining and smelting company.
⁷ "South Africa's Platinum Group Metals Prices to Surpass $3,000/oz by End of 2026 – Report." FMDRCZ, January 2026. https://fmdrc-zambia.com/south-africas-platinum-group-metals-prices-to-surpass-3000-oz-by-end-of-2026-report/.
⁸ "China names companies allowed to export silver over 2026-2027." Reuters, December 2025. https://www.reuters.com/world/asia-pacific/china-names-companies-allowed-export-silver-over-2026-2027-2025-12-30/.
⁹ "Silver Storm Secures US$7 Million Samsung Financing to Restart Mexican Silver Mine." Nasdaq, October 2025. https://www.nasdaq.com/articles/silver-storm-secures-us-7-million-samsung-financing-restart-mexican-silver-mine.
¹⁰ Coeur Mining, Inc. is a U.S.-based precious metals producer focused primarily on silver and gold within the broader materials sector.
¹¹ Bloomberg data: 1/14/2026 WTI price; 1/1/2014 to 1/9/2026; US commercial crude, products inventory.
¹² Bloomberg data: 1/2/2014 to 12/30/2025; CFTC net long oil contracts.
¹³ "Hamm to Halt Drilling in Bakken Shale on Lower Crude Prices." Bloomberg, January 2026. https://www.bloomberg.com/news/articles/2026-01-16/harold-hamm-to-halt-drilling-in-bakken-shale-on-lower-oil-prices.
¹⁴ The "Drill Baby Drill" policy advocates for increased domestic oil and gas production in the U.S., emphasizing energy independence and economic growth.
¹⁵WTI, or West Texas Intermediate, refers to a grade of crude oil. It is one of the main benchmarks in oil pricing, alongside Brent and Dubai Crude, and is often used to refer to the spot price or futures price for that oil.
¹⁶ Bloomberg data: 7/12/2000 to 12/31/2025; Prime rate, Federal Reserve average credit card rate.
¹⁷ Bloomberg data: Global oil demand 12/31/1995 to 12/31/2024.
¹⁸ Bloomberg data: IEA oil demand, supply, surplus 1990–2024.

Important information

The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. Reader should not assume that an investment in any securities and/or precious metals mentioned was or would be profitable in the future. This information is not a recommendation to buy or sell. Past performance is not a guide to future results.

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Commodities generally are volatile and are not suitable for all investors. Please refer to the prospectus for complete information regarding all risks associated with the Trusts.

The value of the Shares relates directly to the value of the precious metal held by the Trust and fluctuations in the price could materially adversely affect investment in the Shares. Several factors may affect the price of precious metals, including: A change in economic conditions, such as a recession, can adversely affect the price of the precious metal held by the Trust. Some metals are used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares; Investors’ expectations with respect to the rate of inflation; currency exchange rates; interest rates; Investment and trading activities of hedge funds and commodity funds; and global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of the precious metal held by the Trust or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the shares. Should there be an increase in the level of hedge activity of the precious metal held by the Trust or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the shares.

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