MARKET CALL: Geopolitical Risk-On Trade Causing Metals Meltup

We've been predicting a meltup in the price of gold since early last year. It has turned into a meltup in the prices of all precious metals, many base metals, and rare earth minerals. The metals meltup is driving up the stock prices of several emerging markets ETFs that have heavy weightings in metal industries. This is all happening because rising geopolitical tensions are driving a military arms race, and defense companies need metals to increase their output; their stock prices are soaring as well. Also boosting metals prices is the geopolitical AI arms race, which is escalating capital spending on technology.

Metal prices got another shot in the arm at the start of this year, when President Donald Trump proposed setting military spending at $1.5 trillion in 2027, up from $906 billion this year, citing "troubled and dangerous times." He did so in a January 7 Truth Social post: "This will allow us to build the 'Dream Military' that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe." In the same thread, he claimed that tariff revenue would be sufficient to fund the military boost, pay down the national debt, and provide a "substantial Dividend to moderate income Patriots." (We doubt that, especially if the Supreme Court soon declares that Trump’s tariffs are unconstitutional!)