Core Viewpoint - The recent gold market pullback, triggered by the announcement of Kevin Warsh as the new Fed Chair, is seen as a healthy correction from overbought conditions, presenting a buying opportunity for investors in precious metals [2][4]. Group 1: Market Dynamics - The gold correction is viewed as a chance for investors to reassess their positions rather than panic [4]. - The announcement of Warsh, perceived as less dovish, may still align with a future interest rate reduction in 2026, as indicated by President Trump [2]. - Crescat's portfolio of undervalued precious and critical metals miners has outperformed gold and silver benchmarks, with Tectonic Metals rising 28% despite a 9% drop in spot gold [3][2]. Group 2: Long-term Trends - The U.S. dollar is believed to be on the verge of a third devaluation wave, following historical precedents during the Great Depression and the end of the Bretton Woods system [6][7]. - Current U.S. debt and deficit levels are at historic highs, with S&P 500 market multiples nearing those of major market peaks in the past [8]. - A significant rotation of global investors into precious metals and resource equities is anticipated, moving away from U.S. megacap tech stocks [9]. Group 3: Central Bank Actions - Since mid-2022, global central banks have been increasing their gold reserves, with net quarterly purchases significantly above the previous decade's average, indicating a long-term trend [25]. - The U.S. dollar's share of global foreign exchange reserves has fallen below 40%, while gold's share has surpassed 30%, marking a historical shift in reserve composition [27][29]. Group 4: Mining Sector Outlook - The performance of senior gold miners in 2025 suggests the beginning of a multi-year cycle, with potential benefits trickling down to junior and development-stage miners [14]. - Major gold miners are currently trading closer to their 10-year averages rather than at peak multiples, indicating room for growth [15]. - The widening spread between gold prices and operating costs is driving profitability, with all-in-sustaining costs for major miners growing at a rate lower than gold price appreciation [18][21]. Group 5: M&A and Exploration - Current M&A activity in the precious metals sector remains below peak levels, suggesting the industry is still in the early stages of strategic re-rating [31]. - There is potential for increased acquisitions of exploration-stage companies, with significant cost differences between exploration and late-stage development projects [33]. - The mining sector is expected to see a favorable backdrop for capital expenditures, driven by rising demand for metals and a structural shortage due to underinvestment [36].