[0:06]I'm Charlotte McCloud with Investingnews.com and here today with me is Ola Hansen, head of commodity strategy at Saxo Bank. Thank you so much for being here. Great to have you back once again. Hi again, Charlotte. Really good to be speaking with you. It's been almost a year since our last conversation, so there's a lot to catch up on. And where I thought we could begin is with gold. We're not even two months into 2026, but already we've seen big ups and downs in gold. So I thought we could begin just by getting your take on where we're at in the cycle for gold. Well, considering it's almost a year since we spoke last in that time, we've seen gold uh trade up by well, more than double, but then since then, well, close to double and then since then come down. So we're currently up around 6 to 7% on the last 12 months, and uh that in itself is a phenomenal uh gain in in such a relatively short period of time and uh, and I think we just we tend to forget that a little bit because just in the last few weeks, the focus has really been on this uh quite dramatic correction we had uh at the end of January and early February. And uh, and I think we have to put that into the context of the the the length and the the the voracity of the rally that we saw in the in the uh weeks leading up to that correction. So what we're going through now is I would say it's just a very healthy uh stabilization, or at least attempt to stabilize um after this parabolic rally ran out of steam. So, um, and it raised the question most certainly whether the the drivers that has been uh that has supported gold and some of the other investment metals uh for for a long time now, whether they have suddenly evaporated, and I think the the answer to that is is a resounding no. And um and that that has been the that has been in place uh since I would say 2022, but really in earnest since 2000, the early parts of 2025. It's the world a better and more secure place than it was yesterday or last year. Uh more certainly not. Uh we're still uh seeing countries governments increasing that debt pile to the extent where we don't really know how they're going to get under control. That is uh that is a yes as well. Do we still have central banks buying not gold in in uh not in record amounts, but at least still in a at a very rapid pace. We have we we have indeed. So, um, so the cornerstones for the rally is is still there, uh, adding to this the the uh the prospect for still for lower interest rates in the US. If if the recent uh development on the inflation front can be can hold, then there is a there is an open invitation for the Fed to cut rates further. And that will probably add some additional demand from asset managers around the world who have been struggling a little bit with the the high cost of funding, basically when you buy gold, you are giving up on something else that pays your interest rate or dividend. And as that difference come down, it becomes easier to get involved with the with the gold market. So, um, so we see this as as a as a consultation phase. Uh we're pivoting around 5,000 right now. And we still have we still have a forecast that could take gold back up towards 6,000 over the next 12 months. So gold's drivers remain in place as you're saying, I do think it's important to remind everybody of that. And price going higher in 2026, but do you see this current consolidation phase that will continue on for some time? I think it might take a little while simply because it was the the correction that we had was quite dramatic and it probably takes a little bit of time for for the markets to to calm down. And we we overall just basically need to see volatility comes down because there's nothing there's nothing gained from these these massive moves we had where volatility spiked because what basically happened and that was actually the reason why I sent out a warning internally but also on on X in the morning of the of the 29th of January, so the day before. They basically saying, hey, guys, the plumbing is breaking apart. Uh the the inner the inner functionings of this market is is increasingly being challenged. So, banks stopped quoting quoting prices to each other. Um the the bid ask spread was whitening out, and uh and the the risk appetite was was coming down simply because it's almost impossible to to to offset any risk that you were being given or taken by by the market. At the same time, when when volatility goes up, the spread between physical gold and paper gold, so the futures market, goes uh goes uh haywire as well. So basically, it it just become market makers around the world with basically driving blind or in a very thick fog like the rest of us. And and that's that's a recipe for something eventually breaking. And that's what we saw. So I think the recipe for recovery is really that we need to see market stabilized. We need to see volatility comes down. Not these big daily swings that basically indicates that there's still quite a bit of a bull bear battle going on in the market. between those still looking for higher price and then still taking profit into into any games. So we need to think see the stabilizer and that could take time. I think we'll keep an eye on economic incoming economic data from the US. Um I'm sure we're going to talk about all a little bit later, but right now there are increased worries that that there could be another there could be an an an a US attack on Iran, and if that if that happens, that could add geopolitical risk into into gold. And if we do break certain levels to the upside, then potentially that could signal that the that the upside path is once again cleared and that will attract some fresh momentum buying into into the gold market. In general, as the gold price goes higher, do people need to expect more volatility because I think people are really used to gold as a stable safe haven, so that's partially why these big moves up and down are a little alarming for some people.
[7:07]Well, they were it was uh we actually did go through uh went through a I would say a modest a couple of years where the gold just continues to grind higher because one thing is grinding higher on a daily basis doesn't really that actually lowers volatility because that lowers the risk of any any certain price swings, but when it's all over the place, then volatility goes up. So we can even we can easily have a rally a resumption of a rally happening at the time where volatility stays relatively muted. So it's it's all about the the intraday price swings and and how how certain or you feel that getting into a position, how certain you feel that you don't get suddenly get stopped out again because of some adverse sudden ne jerk movement in the market. And we've had so many of those in in recent weeks that you really had to place your getting into position was was really difficult, but also holding onto the position was equally difficult, especially if you're trading for for fund managers or hedge funds where you got leverage. You really have to manage your risk very carefully and and and so as the more the volatility contracts, also the bigger the size we're going to see being implemented back into the market. Right now, speculative interest from money managers in both silver and gold is at the lowest we've seen for years almost. And that basically means that there's plenty of room to to get back involved. Back into the market, but that requires stable market with less volatility. So looking forward, you see a higher gold price in 2026. Do you have any thoughts on what could kick off the next leg higher, as you mentioned, there are so many factors driving the metal right now. We've got the geopolitical angle. We've got increasing inflation. Is there any one thing you're looking toward that could end up being that catalyst? Well, we have on on we have unfortunately seen quite a few statements coming out from the White House in in for many months now that that has unsettled the market and we we these days we're never more than one uh I don't know what you even want to call them when it's uh through social, let's just call them a a tweet even though it's not the tweet. But we just want a tweet away from from something uh something happening or something breaking out. So, so that just constantly leaving the market in a little bit of a stressed situation because we just don't know what what could happen next. But besides that, the the economic outlook uh is important, uh, and I'll say especially if we if we see a clear path towards an imminent uh rate cut in the US, I'm sure that that would uh that would attract some some uh attention and and some some buying interest into the market. Also the fact that we are we are heading uh towards a change of the championship at the Federal Reserve and and it would be very surprising if the new uh new Fed chair would not be one that would be more favorable to rate cuts than uh than the current one. I want to make sure that we touch on silver as well. Silver's also had exciting price activity since we last spoke and in the last couple of months. In 2026, do you see it following a similar path to gold or are there different things that could play out? Of course, silver has its precious side as well as its industrial side. So how are you looking at it?
[11:15]Exactly, Charlotte. Now, now it's probably the time where I start to get into deep water with with some some viewers and and listeners because silver has become almost a religion uh for many many traders and investors around the world. Religious to the sense that it can only go one way and that's higher and that the market is fixed. It's uh driven, it's uh it's being held artificially down. And uh there's a lot of conspiracies going on. And it's just we're just on a daily basis fighting through a fog of uh very messy uh messy stream of comments that that is is being shared on social media and on Reddit and whatever you have it. And and uh it's it's difficult really to clear keep keep things separate here, but the way I see it is is that we have a market where where there's no doubt that the demand has been uh exceeding uh supply now for a number of years. So, so inventory levels are are coming down. We're seeing that inventory levels at exchanges both in Shanghai and in New York or in Commax, and that raises the the concern that that something could break in the paper market that basically if there's a delivery that cannot be delivered from a derivative expiry simply because there's not enough underlying. Then we have a market that becomes unhinged and and could scream higher. My argument against this is is really that commodities especially those that has have an industrial impact, um which is not gold, but it's silver, it's platinum. They are also dependent now have has been at least for a number of years of throughout it, dependent on industrial demand. And industrial demand has undoubtedly been rising in recent years. It it's part of the new new economy, part of the the energy transition, especially towards solar and so on.
[13:40]But there's also there's probably also a limit to where prices can go before demand starts to get negatively impacted. And we we don't really know just yet where that level is, but I think we are very close. We have already seen comments from from producers in China that that they are looking at substitution. So at some point industrial demand will start to slow. And that leaves us with that leaves us really with the financial demand or the investment investment demand. And that will come and go as as themes come and go. We saw the meme craze back in the Covid days where stocks just stocks took was was was built to extent to whether they just collapsed or not afterwards. I'm not saying that's going to happen in silver, but there is a speculative craze in in silver right now, in the belief that the system is is rigged and that it can only go one way and that's higher. And that helped accumulate that helped foster this massive rally we had or search we had back in January, which both was from the west, but especially from from speculators in in the east. I think we also have to just keep in mind that it's not that the world has run out of silver. They're running out on they're running out there low in in stocks of of bars that can be used in industrials and that can be stored. But we're not low in silver when it comes to what's stacked in drawers around the family homes around the world. Um and and we are seeing an increased return of scrap coming into the market. So much that some places they basically stopped taking it because they're being inundated with with scrap supply that they they can't hatch properly, and they and it will take time for that to fill into the market. Just a small example, in Denmark, I read at the weekend that at a company in Denmark, which I think they have four branches in in a small country like Denmark with 6 million people. that they have taken that they have bought between four and five tons just in the last three months. And uh considering that the global deficit is here is around 2,000 tons. Just imagine if that we could scale that up to a to a global scale. So when there is an an action, there will always be a reaction. And what we're not pricing in right now, I believe, is the reaction. And that is the potential negative impact on industrial demand, but also the potential positive impact on supply from scrap coming into the market. So, gold can gold over time can go to 10,000, it can go to 20,000. It's it's a monetary metal which doesn't really depends on on on demand from some from areas where demand suddenly could be negatively impacted with the price. Silver hasn't got that luxury. And that basically means if silver, if gold moves towards 6,000, I would believe that I would think that silver at some point will struggle to keep up and we'll see basically gold relatively outperform silver. But when that point, when that time comes, I I can't see it again, it's it's very unclear especially given the demand for the the speculative demand which can carry on uh for for a while longer.
[17:59]There's always so much going on in silver, so thank you for unpacking all of that. And given all of those factors, does Saxo Bank have a 2026 silver price outlook, are we waiting to see how how some of these things end up playing out?
[18:24]Yeah, I had a silver outlook, but that was hit before we ended the ended the January. So uh, so trying to come up with forecasts is just a fool's game uh right now in this market because it could be at 50 at the by the end of the year, it could still be above 100. I I still struggle to see it uh manage to gain a foothold above 100, but I know that goes very much against uh some of the uh some of the outlooks of forecast that it's been thrown around out there. But but let's based on let's based on on on gold reaching 6,000 and based on the long-term correlation between gold and silver, which is for the last 30 years is has been the average gold silver ratio has been around 70. If we say that we could say see that down to 60. Well, then uh then that means silver could go back to 100, but but in order for gold silver to do better than 100 with gold at 60 at 6,000, then the ratio has to come down further below 60 and I'm I I would just struggle to see that um if if if we get these higher prices simply because of the potentially impact on not only demand, but also the potentially impact on supply coming into the market. And just a small followup question. You mentioned the Asian market dynamics for gold and silver. We have this week the Lunar New Year holiday, so we've got closures over there. How is that playing into what's happening with gold and silver and what is it perhaps telling us about the role of Asia in the prices right now? Well, on the the at the start of the Lunar New Year, we we saw gold and silver sell off and that was kind of uh mentioned by anyone as being no surprise because the East the demand from the East has been been a major factor pulling prices higher. For many months and especially in the last the last six months and and that led to some some believe that we may see a bit of a lull here in in the next week or so, while Asian markets are closed. And uh especially considering that there was probably some profit taking coming into the market ahead of the the close, who who wants to maintain the position for for eight days when when you can't get in and out when the markets are shot, um that that's uh that's probably that's a bit of a tall order for for some traders. So we probably saw some profit taking before the the holiday. The question is really how they how would they respond when they when they come back? And I think if we are if they come back to more less unchanged prices, they will see that as probably as a buying opportunity, simply the fact that while they probably hope that they might be able to pick it up cheaper while in in the absence, but if we can manage to hold these levels, then then there could be a positive story building as we as we see China reopen. But you absolutely right. It is a major it is a major driver and and one that we need to to keep an eye on. To the extent that if you look at silver, there was a silver or there is a silver only the only silver only fund in China, basically in the days prior to the collapse or the correction back in late January. trade at a almost a 50% discount or premium to to the underlying value. So basically, investors were prepared to pay a massive premium above the value what they're actually buying. And and that tells you a story about the speculative craze and uh potentially also the need just to moderate that because you just you're really at at risk of ending up losing money when you buy into something that's at such a high premium to what the underlying is is worth. So, um, so the exchanges have stepped in, tried to calm down the the speculative frenzy somewhat, but that's speculative frenzy would probably be maintained as long as we don't see an improvement in the Chinese property market. Because that was really the big trigger that started sending that started sending investors into the precious metal space over the last few years, simply because the property market has been the the key source of savings for for many years. And uh now we've been in a downturn for the last four years and that that has been one of the reasons why monies has been redirected into the precious metal market. And uh and it's only I would say a recovery in the property market or recovery in the economy as as a whole, providing a great opportunity in the stock market that that could see this this speculative frenzy start to ease.
[24:38]Great points. And I'm always excited to talk about precious metals, but we should go over to oil, which you mentioned at the beginning of the conversation in terms of the geopolitical situation developing between the US and Iran. So, for oil, I've been hearing that this is a sector that people might want to start to position in right now, but it will really start taking off in the longer term. But how how are you seeing it? How are dynamics looking there?
[25:19]Well, we have a we have an oil market which is at this point in time, given the total return if you were buying in uh buying in oil a year ago, and you were getting the the benefit of the role, or you bought an ETF that was investing in all, then you'll basically be sitting on a small profit of around two to 3% right now. So oil has not been going anywhere now for the last year. It's it's actually up a bit this year, which is which is offsetting some losses we had last year. Brent crude is currently up around 15%. And I say it goes a little bit against the the the expectation that that the market generally had at the start of the year, where there's a lot of focus on an overhang of supply or supply clock that was going to be a record size this year. But the fact that matter the fact is instead of trading below 60 and Brent, we're now trading above trading close to 70. And it highlights two things. First of all, that this glut has not really materialized to the extent that the market was was believing or or looking for. Uh part of that has probably been a great deal of of buying from Chinese uh into Chinese strategic reserves, but also some OPEC plus members have not been able to increase production to the extent that they they had been allowed to through the agreements that they they made last year. So, um, so it's it's really, so the market for now is is is is airing on the side of non uh disbelief in an attack. Simply because otherwise we would have been we would have been higher than $20, because we have a on a daily basis more than 20 million barrels of crude going through the straight of Hormuz, which is the narrowest straight between Iran and Oman. And uh not only will the Iran production be impacted, but also from Saudi Arabia, Kuwait and Iraq and the gas from Qatar. So, um, so it's it's really, so the market for now is is is is not really buying in or they they hope that that is not going to escalate further, but um, I I simply don't know. I'm I'm probably a little bit shaken in my believe that it's not going to happen, but uh but let's see, but it will if it does happen, then it will it will help even faster to bring down the the glut that the market has been focusing on. Russia is struggling to to keep keep maintain production through sanctions. So overall, your question at the beginning, if the energy sector is is something that that's starting to get back on on investors radar, I think the the answer to that is a definite yes. Um we are seeing energy company starting to to be be looked after looked at again. And and simply you have to look at higher prices in years to come, simply in order to ensure that that there's enough investment going into finding the oil that is that is going to be needed, not only to fulfill uh to to manage replacements wells that runs dry, but also to ensure that that the expected increase in demand in the coming years will continue to be met. So, so I believe that we are we are fairly close to a low point in in all prices and that over time, they would have to find a higher level in order to to attract the investment that is required. And and that will benefit energy companies. Great overview of what's going on with oil. And before I let you go, I want to throw in a question on copper as well, because we spoke about that last time.
