WTF Is Happening to Gold, Silver and Gas?

Jeff Snider · Atlas Financial

Silver's rally was a supply squeeze, not reflation; at a 90 gold-silver ratio silver falls toward $43, possibly the thirties.

Silver's peak in January pushed the gold-silver ratio down to about 45, which many read as industrial demand from electrification, AI and reflation. Snider argues it was a supply squeeze, like 2011 and 1980, and not demand-led. Now the ratio is back near 79-80 as silver weakens, which he reads as the market returning to a 'forgot how to grow' economy. He thinks the ratio should settle nearer 90, given weak Chinese GDP. With gold at $4,000, a 90 ratio implies silver around $43. Markets overshoot, so silver could fall into the thirties.

“If gold holds here at $4,000 an ounce, that would imply a silver price at 90 gold to silver ratio of roughly $43 per ounce.”at 14:39

Jeff Snider · Atlas Financial

Gold is in an extended correction from official-sector liquidation, but its longer-term fundamentals remain positive.

Two gold liquidation events in recent weeks, including the Friday before the episode, are likely forced sales by overseas official holders (central banks or reserve managers) raising dollars during dollar-funding stress. Gold is illiquid, but after a large run-up it can still be sold at a reasonable price, so it is a reserve asset to sell in a pinch. Gold has also lost momentum relative to 2025 and is being dragged down as silver's price is repriced. Snider nonetheless argues gold's fundamentals remain positive over the longer term. The fundamental case is not inflation; it is an anti-hedge against dollar and monetary disruption.

“Gold is a precious metal. It doesn't have the same momentum that it had in 2025. So it's not surprising to see gold in a extended correction even though the fundamentals remain positive for gold over the longer term.”at 15:29

Jeff Snider · Atlas Financial

Copper is no longer responding to supply news and may be starting to price weaker demand; tariff resolution would drop it.

Copper is near its record high, but Snider calls it supply-driven and tariff-driven rather than reflationary. Chile's national producer cut its 2026 output expectation to an 8.4% fall, from a 2.6% decline projected a couple of months earlier. Roughly 70% of above-ground inventories are stuck in the US because of fears of tariffs. Copper's stair-step rallies on supply news have flattened over the past six months, and it may be rolling over. He thinks copper is now responding to demand worries. Once the tariff situation resolves, copper and the copper-to-gold ratio will likely fall sharply.

“copper prices no longer responding to supply news and supply issues instead maybe potentially starting to price more demand even though on this from the supply perspective.”at 20:44

Jeff Snider · Atlas Financial

Iron and steel are falling in both dollar and yuan terms, signaling weak industrial demand and no reflation.

Iron prices are near multi-year lows, close to 2022 levels and at lows not seen in many years outside 2022. They are weakening in dollar terms and in yuan terms, which suggests further downside. Iron and steel reflect the macro economy's background. China's export boom should have lifted demand for these metals if it were creating a reflationary effect. Instead, the metals show that domestic Chinese weakness outweighs external demand. The broader industrial base is not in renaissance or revival.

“So iron prices have been weakening and more recently, not only do you have US dollar iron prices weakening, you have iron prices weakening in China's Yuan denomination as well.”at 22:24

Jeff Snider · Atlas Financial

Iran talk headlines are unreliable; oil has stayed in its range, so the de-escalation has not lowered prices.

Reports of informal indirect US-Iran talks through Qatar or another Middle East intermediary have reduced some geopolitical risk premium. But the outcome is unclear, and President Trump's optimism echoes earlier headlines during the eight-month energy shock. Oil dropped sharply on a single day, but it has stayed in the same range for about six to seven weeks. The market has not priced in a durable de-escalation.

“President Trump seemed optimistic. Then again, we've heard this repeatedly through, the last eight months of the energy shock so far. But overall, oil prices have basically held up.”at 2:16

Jeff Snider · Atlas Financial

Gasoline has flipped below WTI, signaling consumer demand destruction as weak EIA demand data confirms it.

Through the summer, retail gasoline ran above WTI because of tight US and global gasoline fundamentals and a low-inventory uncertainty premium. Since mid-October, gasoline has fallen while oil has held near the top of its range, so gasoline is now below oil. Snider concedes seasonality or refinery maintenance could explain this. But EIA product-supplied data, a proxy for demand, was weak this past summer, weaker than last year. The latest weekly figure showed a sharp drop of about 8.3 million barrels per day. Gasoline is closer to the consumer economy, so the flip points to demand destruction if it holds beyond the seasonal pattern.

“But by and large, what we're really looking at here is the potential for demand destruction starting to really show up in gasoline and gasoline prices.”at 4:03

Jeff Snider · Atlas Financial

A renewed energy shock is triggering a dollar shock, with dollar providers turning risk-averse.

Gold liquidations and sharp moves in silver, along with gasoline and bond-market moves, point to a dollar-funding squeeze. Overseas officials appear to be selling gold and Treasuries to raise liquid dollars. Snider argues energy shocks produce dollar shocks. The energy shock renewed in the second half of October, and dollar providers grew more risk-averse, partly because of rising demand-destruction risk. This is more risk aversion than during the rest of the energy shock.

“Energy shocks produce dollar shocks and that's exactly what we're seeing here. A renewal of the energy shock producing a dollar shock in the second half of October,”at 10:23

Jeff Snider · Atlas Financial

China's domestic economy is ridiculously weak and deteriorating; booming exports do not offset it.

Snider uses China as a proxy for the global economy. China's internal economy has been very weak and getting worse, and the boring metals and Chinese GDP data show that. Exports have been booming, which should have supported demand for iron and steel if it were creating a reflationary effect. But the metals' weakness shows that external demand is not strong enough to offset domestic weakness, so the external sector is less robust than the export figures suggest.

“Remember the Chinese economy as sort of a proxy for the rest of the world, especially since the Chinese economy itself internally has been ridiculously weak and getting weaker.”at 22:48

Jeff Snider · Atlas Financial

The Treasury rally reflects flight to safety and demand destruction, which leaves the Fed less room for error.

Long-end Treasury yields are falling, and the two-year yield has followed more recently. Snider reads the bond rally as flight to safety, with gold liquidations and gasoline weakness at the same time. Gasoline weakness relative to oil suggests demand destruction is becoming more visible. That gives the Fed less room to make policy mistakes. Foreign officials are also selling Treasuries to raise liquidity.

“Weakness in gasoline relative to oil, for example, would suggest the demand destruction becoming more and more visible, which would be one reason why, for example, we're seeing a rally in US treasuries and other government bonds because weakness in terms of demand destruction would mean less room for the Fed to make more mistakes.”at 24:31

Jeff Snider · Atlas Financial

The economy is fragile; energy shock is turning into demand destruction, not reflation.

Snider reads the commodity complex as one consistent message. Gasoline flipping below oil, weak EIA demand data, silver's unwinding and iron prices falling all point the same way. He says the commodity markets are signaling that the energy shock is turning into demand destruction in a fragile economy that was never robust. The narrative has shifted from inflation and dollar debasement toward 'forgot how to grow' and energy-driven demand destruction.

“it is instead potential for energy shock to lead to demand destruction from a fragile economy that was never not fragile to begin with.”at 25:43