Middelkoop isn’t backing away from the commodities trade after the latest selloff - he’s ADDING to his silver position!
Willem is not treating the latest metals selloff as a warning. He is treating it as an invitation.
In a Top of Mine interview he said he has been adding silver in his personal account and putting fresh fund capital to work while miners correct. The founder of the Commodity Discovery Fund and author of The Big Reset called the pullback a gift inside what he still describes as a generational commodities boom.
The recent drop in gold from near 4700 toward 4430 did not change his map.
He said the story is still the big picture. Gold miners spent more than a decade in a valuation trough after the last cycle peak around 2008 to 2010.
Even after last year’s surge, names such as Barrick and Newmont still trade at price earnings ratios of 11 to 13. Historically those stocks often carried multiples of 20 to 25.
In his view the sector is only now trying to break out of a 12 year consolidation and return toward more normal valuations.
Central banks remain the quiet giant in the room. Middelkoop noted this may be the fifth straight year of official buying near 1000 tons, about one third of world mine supply.
That buying, he argued, began after the Ukraine war and reflects a hedge by the architects of the current system. “They know and understand and sense this is the last part of this dollar centered world,” he said.
Physical gold in official vaults now exceeds the value of all US Treasuries held there. That, to him, marks gold moving back into the core of the financial system as power shifts from a unipolar order toward a multipolar one.
Silver is where his language gets hottest. After Friday’s sharp drop the metal was still holding near 66. He has been buying anyway. “I’ve grown my personal silver position in the last two weeks because I think silver is a steal.”
He called the slide a clean technical retracement to the breakout zone around 55. “I wouldn’t be surprised to see silver moving back up to 100 over the next few months or quarters.”
Then he went further. His long term target is not 100:
“My long term target for silver is 500 and not 100.”
The path through 100, in his telling, is both monetary and industrial.
Silver often lags gold then outruns it. After the break above 30 less than two years ago it sprinted toward 50, then 100, even 120. “Silver can be the fastest horse in the metal race.”
A historical 10 to 1 gold silver ratio with gold near 5000 would imply silver near 500.
Add decades of production deficits and silver’s role as the best industrial conductor and he sees shortage plus monetary demand doing the heavy lifting.
Higher for longer rates do not scare him off the thesis. He pointed to falling bond prices, rising yields, and the Federal Reserve adding more than 330 billion of Treasuries over 12 months. “In my book that’s called QE.”
Europe’s largest pension fund, ABP, sold 84 percent of its Treasury holdings. Liquidity tricks and fiscal strain, he said, still favor hard assets.
Miners remain the leverage. After a strong August they fell harder than bullion on the latest flush. Middelkoop called that dip “very tempting.”
His fund was still up about 18 percent month to date and 15 percent year to date after a 71 percent year last year. “According to our analysis, we’re in a very early part of a generational boom market in commodities.”
Shortages, a geopolitical fight over metals, and currency debasement form what he called a perfect storm that “could take decades.”
He is not blind to cost inflation. Barrick realized over 4400 an ounce while all in sustaining costs rose. Even so he highlighted Newmont’s free cash flow near a billion a month and said investors should expect buybacks and rising dividends. Generalist money, he added, is starting to notice those cash flows on Bloomberg screens after years of ignoring the sector.
The biggest torque, he argued, still sits in quality juniors. Average explorers remain about 70 percent below 2008 peak valuations. The TSX Venture Index was barely positive year to date. Seniors have already run. Discovery and development names have not. His fund keeps 50 to 60 percent in exploration and development names and about 30 percent in seniors.
“The most leveraged, the highest torque you will find in the more junior names.” He wants world class scale: 10 million ounces of gold is rare, maybe once every three years. Interest starts around 3 million ounces with room to grow toward 5 or 10. The same filter applies to copper, silver, lithium, uranium, and nickel.
“If you stick with the winners, you will do well.”
Last week his team raised cash and looked early. Then GDX dropped nearly 10 percent in a few sessions. They used the cash. “We’ve been participating in two private placement deals today and we’re investing 2 million of our cash.”
The lesson from 15 years of mistakes, he said, is simple. Take some profit. Buy the corrections. Stay in the best discoveries.
That is the bullish case in one sitting.
Middelkoop is not waiting for perfect calm.
He is adding silver because he thinks it is a steal, funding private placements on weakness, and holding a 500 silver target while gold miners and juniors still look cheap against a multi year reset in money and power.
