Welcome to the On the Tape podcast. I'm your host, Danny Moses, and welcome to my favorite week of the year, Super Bowl week. I'm going to get to my picks for the game at the end of this brief episode, but before I get to that, there are some big things happening in the macro world that I want to address.
Let's start with this recent pullback in both silver and gold. Both metals have had historic runs higher in recent weeks. And to put that in perspective, while silver is off over 25% from its recent highs, it's still up 25% in 2026 and over 170% higher over the past year. Gold is off about 10 or 11% from its recent highs after having eclipsed $5,000 a week ago, and it's up almost 75% over the past year. We are no doubt going to be dealing with this volatility for the foreseeable future. So, please trade accordingly.
For those that are new to this trade and might have just recently dipped their toes into what might feel like shark-infested water, just know that there is much more to this trade than just the prices of the physical metals. There are many ways to express the long or short trade on gold and silver. And depending on your appetite for risk and volatility, you can choose your adventure. There are closed-end trusts like Sprott Physical Gold Trust (PHYS) and Sprott Physical Silver Trust (PSLV) that own the underlying physical commodity, and ETFs like GLD and SLV that represent more of a paper ownership. While both closed-end funds and ETFs track pretty closely to each other, I take more comfort in owning the closed-end trust.
Another way to express the long thesis on these metals is to own the publicly traded miners. I won't go into the economics of where the prices of gold and silver need to be to justify owning these miners, but let's just say that the price of gold and silver would need to drop substantially to make these stocks look expensive. These miners are and will always be an under-owned sector in the professional money management world, as they are part of the materials sector in the S&P 500 that has under a 2% weighting in the index. The only miner in the S&P 500 is Newmont with over 120 billion market cap. The ETFs I look at in the mining sector are GDX and GDXJ for gold and SIL and SILJ for silver. In our What Are We Doing Substack that I do with Porter Collins and Vincent Daniel, we actually talk about some of the single names within those ETFs that we prefer, but those get you some broad exposure.
Where the trade has been tricky lately has really come from more technical factors. There have been billions of dollars pouring into these levered ETFs, 2x and 3x in some cases. And while they can provide torque on the way up, it can be just as powerful during a sell-off. There have also been continued increases in margin requirements from the CME Group related to trading futures on the COMEX. But until last Friday, these kept marching higher. So what happened? Let's recognize that we were due for a correction in the sector given the recent spikes in both the underlying metals and related stocks. The RSI, or relative strength index, and overbought signals were at historic highs, while the US dollar, which tends to trade in the opposite direction of gold, was at multi-year lows.
So was it Kevin Warsh being put forward as Fed chair that did it? Warsh was the odds-on favorite in the middle of January until the more perceived dovish Rick Rieder from BlackRock emerged as a dark horse favorite, only to see Warsh jump back into the lead last Thursday. If confirmed, Warsh begins his four-year term in June. While he has been known as an inflation hawk and kind of anti-QE, he has indicated a desire to cut rates, at least in the short term, and the odds for a rate cut or two occurring in 2026 did not change upon his nomination. We also know that Treasury Secretary Bessent, who was instrumental in getting Warsh nominated, is hell-bent on keeping rates low, especially on the short end, as he plans to issue plenty of T-bills to fund the government.
So, while choosing Warsh might send a more hawkish message and less of a threat to the Fed's independence, I don't think it will be long before we see some dovish commentary that runs counter to that narrative. To me, the trends in place that have sent gold from around $2,000 just a few years ago to where it sits today are still in place. The US dollar, while it has had intermittent rallies, continues to decline, and the role of fiat currencies all over the world has been brought into question as the amount of sovereign debt backed by these currencies cannot be tackled effectively. Global central banks such as the People's Bank of China continue to buy physical gold, in addition to other countries such as Brazil, India, Turkey, and Poland. And there is no sign of that stopping.
As policies in the United States continue to destabilize or weaken the dollar's role in the global economy, I think this will continue. And it seems the world is slowly returning to a hard currency policy backed by gold and readopting some form of the gold standard that was eradicated in 1971 in order to protect their purchasing power. Gold has been sniffing all of these issues out for years. And while it has historically been used as a hedge in times of inflation, it is basically telling us that we are going to have problems dealing with our debt and risk devaluing fiat currencies to address short-term issues that will come at the expense of long-term inflation.
There is no question that Bitcoin, sometimes called digital gold, shares some of the same characteristics as gold when it comes to being a hedge to fiat currencies with no ability, according to the Satoshi whitepaper, to issue any more coins. However, I personally choose an asset that has been around for over 5,000 years. I also worry that Bitcoin's advancement from a regulatory perspective that has brought it more credibility and access might lend itself to be more cyclical in a risk-off environment. I have no doubt that Bitcoin will continue to evolve and cement its place in the global economy, but for now, I am using gold as my vehicle of choice.
It's only fitting that I close this with silver before I get to my Super Bowl picks, as silver has historically been viewed as much more of a gambler's game than gold. If you are unfamiliar with the Hunt brothers and their attempt to corner the silver market in 1980, it's worth a read. If you have been paying attention to the news and rumors out there regarding banks being caught short silver and physical delivery can't be met, as well as AI chatbots that have been created to explain what might be happening in the markets, in the words of Luke Gromen, you might be missing the forest for the trees.
Silver is known for having the highest electrical and thermal conductivity of all the elements. It can be drawn into wires, hammered into thin sheets. Silver shares many physical and chemical traits with gold and copper, and most silver is mined as a byproduct during the refining of metals like copper, gold, lead, and zinc. It's also highly resistant to corrosion and oxidation, as you see used in jewelry, coins, and bullion. But it's silver's conductivity and its use in modern technology that I believe has created the notable imbalance we are seeing today between supply and demand.
While silver has been used for decades in medical equipment and things like water purification, its use in products like EV batteries, solar panels, and most recently AI data centers has created unprecedented physical demand. It's not clear at what price we could see some form of demand destruction where silver creates an uneconomical outcome for some of these products, but demand is far outstripping supply at this point, and China has played a key role in exacerbating this imbalance. While there is talk of replacing some of these in-demand products and build-out with copper or other metals, it would take years, and we are clearly in an AI arms race.
Okay, sorry for interviewing myself for this episode, but I hope I did provide some color and context for what's happening out there. All right, on to Super Bowl 60: Seattle Seahawks versus New England Patriots from Levi's Stadium in Santa Clara, California. Let's start with the weather. Looks like it shouldn't be a big factor. Temps in the 60s, slight chance of rain, not too much wind, but that's always unpredictable.
Just like the 4.2 magnitude earthquake that rocked the Bay Area on Monday, this is a rematch from Super Bowl 49 when the Patriots beat the Seahawks 28-24 in what might have been the dumbest play call in Super Bowl history. Trailing by four with 26 seconds left and a timeout, the Seahawks had second and goal from the Patriots' one and decided to throw the ball, and it was intercepted by Malcolm Butler. How do you not hand the ball to Marshawn Lynch?
The irony is not lost on me that Pete Carroll was actually the coach of the Seahawks at the time, and he was just fired by the Las Vegas Raiders as coach. And now the offensive coordinator for the Seahawks after this game looks like he will become the head coach of the Las Vegas Raiders as Carroll's replacement. Seattle is currently a four-and-a-half-point favorite, and the over/under is 45 and a half. Those lines feel about right, but I'll get to what I'm going to take in a moment. Both teams were 5-0 against their other conference this year, but Seattle faced much better competition.
I have not been, and I will never be, a Sam Darnold believer, as I think he tends to get panicky at times, and maybe it's just the PTSD from when he was a New York Jet. But I think Seattle has been great at creating game plans to take the pressure off of Darnold, and the way that Kenneth Walker III is running, and I'll have a play on that in a second, I think they have the right combination. I think Drake Maye is incredible, and he may throw one of the best balls I have ever seen, but he has looked more and more his age lately, 23. And while Josh McDaniels has done an incredible job with him, Maye's stats in the playoffs have not been good. He has fumbled six times, he's lost three of them, he's thrown two picks, and his completion rate is under 56%. Granted, he did get by some of the top defenses in the league. They did have injuries on their offense, but it hasn't been pretty.
All right, here goes. Let's think of this in units and say we have a hundred of them, okay? And this is for informational purposes only. Give me Seattle minus four and a half for 50 units. While there is a very good chance Seattle wins and the MVP will probably be Sam Darnold, I just can't bring myself to take that at plus 115. So, I'm going to go with running back Kenneth Walker III at about eight to one for 10 units. The last running back to be MVP of the Super Bowl was Terrell Davis, an ex-Georgia Bulldog, in Super Bowl 32, 28 years ago. He ran for 157 yards and three touchdowns. I was actually at that game.
I think Patriots tight end Hunter Henry will be Drake Maye's security blanket. I like him to have at least 39 yards receiving. So, give me 20 units at minus 110 on that. All right. Will Sam Darnold throw an interception? I think yes. It's a good hedge anyway since I'm taking Seattle. Give me 10 units on that at minus 131. He did throw 14 interceptions this year, by the way, although none in the playoffs. All right, more torture for Jet fans. Will Leonard Williams sack Drake Maye and cause a fumble on the same play? I'm going to take that for five units at 19 to 1.
And the last one at 300 to 1, you're going to love this. Will Harold Landry III for the Patriots sack Darnold, cause a fumble, and recover it himself? I couldn't resist that at 300 to 1. And a special Cali bonus pick that I can't pass on in Kalshi under the mentions section for the Super Bowl. There's a trade where you can buy at 69 cents: Will Chris Collinsworth or Mike Tirico, the broadcast team, say the words 'wind' or 'windy' at any point from kickoff until the end of the game? This is in Santa Clara, California, mind you. And NBC, by the way, has some new wind technology that they're going to be using. So, I find it hard to believe that between the extra points, the field goals, and passing, we won't get the mention of 'wind' or 'windy' at some point. Tirico loves talking about it in football and in golf.
All right, thanks for listening. I'll be back next week, and I hope you've been able to catch the first two episodes of The Danny Moses Show, Fridays at 7 p.m. on Squeeze News, and you can catch it on their YouTube channel. Have a great Super Bowl.
