Happy Tuesday, GoldBuzzers!

It’s been a bruising few months in gold, silver and the miners, and this kind of stretch quietly wears a lot of good investors down. In Take Action Tuesday I want to step back from the day-to-day and look at the bigger picture: how far these markets fall, how long they stay down, and how to still be holding when the move we’re all waiting for finally arrives.

O️k. Let’s get into it. ⬇️

The weakness continues, though both metals caught their breath on Monday. Gold finished just above $4,000 an ounce, down slightly on the day and still drifting near nine-month lows, while silver climbed back above $56 after touching an eight-month low on Friday.

The story behind both moves is the same one that’s run all summer: oil. Brent briefly topped $91 a barrel after a weekend of fresh military exchanges between the US and Iran, including attacks on vessels transiting the Strait of Hormuz and a strike on an oil facility in Kuwait. Prices then eased to around $88 after Iran's foreign ministry said it had received proposals from international mediators and that talks with the US could continue if they served the country's national interests.

Even after that pullback, oil remains up roughly 30 percent from its July lows, keeping inflation worries firmly in charge of the rate outlook. Cleveland Fed President Beth Hammack added her voice on Friday to a growing chorus of policymakers arguing that rate hikes may be needed to deal with persistent inflation, and markets now see roughly a four in five chance of at least one hike by December.

The Fed meets July 28-29, and until the rate picture clears, gold and silver will likely keep trading oil headlines rather than their own fundamentals.

It’s easy to lose sight of it in an extended drawdown period like this, but the bull market in gold and silver isn’t over. The largest part of it is still ahead. I’ve said publicly that I expect gold at least above $10,000 and silver above $200, and from where they trade today that’s another 2.5 times on gold and almost 4 times on silver.

And if we get those kind of numbers, the miners are where the real money will be made. They’re the leverage on the metals. Just look at what the different sectors did in the last upleg.

From the 2020 low to the 2026 peak, silver ran nearly ten times over. The senior gold and silver miner ETFs returned more than six times, but some miners returned an incredible 10x-90x. That’s the prize, and it’s the reason to be in this sector at all.

The reason it’s so hard to collect those returns is because these same markets, and the miners most of all, don’t just simply climb. They collapse, and then they stay collapsed.

The whole complex topped together in 2011. Gold fell 45 percent and took nine years to recover. Silver fell 75 percent and the senior mining shares fell more than 80 percent, and didn’t get back to even until 2025, fourteen years later. The very leverage that makes the miners so powerful on the way up makes them brutal on the way down. An 80 percent fall is not a dip you buy with a smile. It’s the kind of loss that ends people's involvement in the sector for good, usually right before it turns.

Across the full spectrum of mining companies that we track for GoldBuzz INSIDER, the average maximum drawdown so far this year has been a whopping 44%. Many miners are down over 60% and a few are already down over 80% from their 52-week highs.

That’s the trap. The upside is enormous, but the drawdowns on the road to it are savage enough to shake almost everyone out before they get there.

Nobody sits patiently through a fourteen-year drawdown. They hold through the first few years of the fall, certain it will turn soon. They watch it keep falling. Somewhere near the bottom, exhausted and out of conviction, they sell. Then they stay out through the recovery, because the market that just took 80 percent from them feels like the last place on earth to put their hard-earned money.

The depth of the fall does the financial damage. The length of it does the psychological damage, and the psychological damage is what makes people sell at the exact bottom and miss the move they were waiting for all along. The prize is real. Surviving the wait to claim it is the really hard part.

Having studied these markets for many years, there are several disciplined answers, and they’re not mutually exclusive. Position sizing, so that no single miner can do fatal damage. Staged buying, adding on the way down so the deep prices work for you rather than against you. Valuation discipline, refusing to chase a market that’s already run. And trend-based rules, which step aside when the trend breaks and step back when it resumes. Each has a cost. Each is simply a way of deciding in advance that you won’t be the one who sells at the bottom.

The trend approach is the one I know best, since I studied it for over 4 years, so let me show you plainly what it does, and be honest about what it doesn’t. Applied to the gold miners across their whole history, stepping aside when the trend broke cut the worst fall from around 80 percent to the low thirties. It did the same in the silver miners. That’s the difference between a setback you hold through and a loss that ends your involvement in the sector.

The price is that it sits in cash much of the time and gives up part of every rally, so it’s not the way to squeeze the last dollar out of a raging bull if that’s what you’re trying to do. And in a choppy, directionless market it can get whipsawed for small losses. It’s strongest in the deep, one-way declines, and weakest in the chop. But the deep, one-way declines are the ones that shake people out of the sector for good, and staying clear of those is most of the battle.

If this bull runs the way the evidence suggests, from here to gold at $10,000 and silver at $200, the gains ahead could dwarf almost anything the sector has produced before, and the miners could multiply several times over on top of that.

The only thing standing between an investor and that prize is withstanding the drawdowns along the way, and the very human tendency to sell into them. Everything we do is built around one idea: keep you in your seat, and out of the crashes, so that you’re still holding when the next big move comes.

That’s all for this Tuesday, folks. I’ll see you on Thursday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com