12 February 2026 (pre-recorded 9 February 2026)
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[INTRODUCTION]
Staci West (SW): Welcome back to the Investing on the go podcast brought to you by FundCalibre. Gold and silver markets have seen dramatic swings recently, we explore why volatility is part of the metals’ natural cycle and continued opportunities.
Darius McDermott (DM): I’m Darius McDermott from FundCalibre. Now, whenever I host a podcast, I’m obligated to say how excited I am about the up and coming 20 or so minutes. And we booked this in our diaries probably somewhere between three and five weeks ago. So it’s with absolute delight I’ve got Ned Naylor-Leyland, who is the manager on the Jupiter Gold and Silver fund. Ned, good afternoon.
Ned Naylor-Leyland (NNL): Good afternoon Darius.
[INTERVIEW]
DM: So when we booked this in you know, it was just straight, everything was going up every day. It felt a little bit lucky, but it was just going up. Then about, well, the day of the announcement of the new Fed chairman, I don’t know if that triggered it or not, but it then started going south and going south in quite a spectacular fashion. And since then it’s been up and down like the proverbial yo-yo, so look, you don’t wanna listen to me, you wanna listen to Ned, what’s going on?
NNL: So thanks to the opportunity Darius, look, so what happened in I’m going to rewind slightly further back than that. The year previously is the gold attracted a lot of leverage from sophisticated hedge fund, CTA style trend following people in other words, they’re more sophisticated than retail, if we put it like that. Whereas with silver, what happened is we got a lot of excitement in January where people were not just buying physical silver down the bullion dealer. They were let’s say being rather overly attacking in the way that they were approaching the silver market. And you are right, that’s exactly what it was. It was the announcement of Kevin Walsh as the nomination for Fed chair. There are other interesting topics surrounding that, which I’m not sure we have time to get onto today.
That made the market think, gosh, maybe the Fed will be less accommodative than was expected. Now, of course, gold and silver are always about that. So if we’re in dovish mode, they go up and if we turn hawkish, they go down.
So really all that happened was we had a very, very brief, but for people who had borrowed money to go along silver painful trend reversal, and we had a liquidation event of people who were on margin who had borrowed to fund that trade.
Now, from my perspective, Darius, this is all very good news because really there are three kinds of people that we need to think about with gold and silver. One is those people who are borrowing and were overly excited. Well, they got washed out, good for them. I’m not worried about them. That’s their problem. Move along swiftly, indeed, a clearing of the decks of all that is always a good thing.
The second class of people that, the people on this podcast listening and you and I, which are what we would describe as stackers, they own physical metal and they are long the mining companies. And really none of this was a massive surprise. We did have a de-leveraging event in October as well. Actually quite similar, just not big. Both of them are purely technical. They’re allowed for a reset and they’re allowed for then the next move to start.
And then the third and probably the most important cadre of all are the people who are not in and are looking at this going, gosh, do I need to be in gold and silver? And the answer is they do need to. And they’ve been waiting for an entry point and what we saw whatever it is 10 days ago was a moment which I think they’ve mis-characterised. They looked at it and thought, gosh, thank goodness this is all over. We don’t need to worry about it. And as and when the dollar gold price, because really it’s always about the dollar gold price rather than silvers comes alongside. When that gets back through $5,500 an ounce, which I believe it will do in relatively short order for me, that will be the moment where those people start to think, wait a minute, what’s going on here? This is still happening. And I think then you are gonna see a new wave of interest in this topic of debasement only gold and silver and all the rest of it.
DM: So I think now’s absolutely the right time to say at time of recording — because I checked just before we came on, gold was $5,040 and silver was $82.50 per ounce. So let’s get that nice and public because so some of the hot money – your words – got burned out and there.
I know they’re linked, but they are quite separate metals. Gold has more central bank value and I know a lot of the demand has been coming from there actually silver’s a proper industrial metal in its own right. And I think the sort of supply demand is we need twice as much as we’ve got. The other thing I know, and I’ve never done mining, is you just don’t go down the high street and open a silver mine tomorrow and get loads more supply.
So I know predictions are a fools game, but you know, you and I are on this call, so maybe we can be a bit foolish. Where do you think these two metals settle at when there isn’t the exuberance or because of the potential for the new buyer still to come? That actually we are gonna have volatility and leverage and I do want at some stage to come and talk about the March deliveries, which is a nice additional technical for us to go through.
NNL: Look, I think that the thing to realise is that that leverage and volatility and and flow is central to every asset class. Now, whether you look at Mag7, Nvidia on its own, or gold and silver, people don’t like buying stuff or a lot of people don’t just like buying stuff in cash. We do, the people on this podcast do, but there’s a much wider selection of investors that don’t want to do that. They want to get them more excited. But the first thing to say is that gold and silver directionally are the same thing. You are right? That silver is also an industrial metal, but they move together.
In other words, gold up, silver up, gold down, silver down. You don’t find the two things decoupling from each other. You are with both gold and silver short politicians. So that’s what you are doing. You’re saying I want to be short my local currency in this, in our case Sterling and the behaviour of politicians, it is just that with silver, you are also long conductivity. So you’re saying I wanna be both short, the politicians and long the future, through tech, et cetera, but they do move together. It’s a very important point.
But I think that it is fair to say that because people now like things to move around a lot more than they did in the past. You’ll remember, and I certainly remember that 10, 15, 20 years ago, people were scared of volatility. Now there are a lot of investors actually want that. They like things to move around a lot. But silver has become more exciting for investors to jump in on. So you have to be aware that there will be accentuated volatility, leverage sizzle that goes with silver over and above gold because it moves around more.
DM: Yeah, I totally accept they move in the same direction. The velocity of the movement is different. Gold has been having what, two if not three good years where it’s gone from roughly $2,000 to $5,500 on that Friday and $5,000 as we speak. Whereas silver really only started getting its act into gear in the second half. And then January, and sorry, December and January when it, it doubled again. I mean it doubled in a month. The spot price anyway. So yeah, I think you’re absolutely right. The volatility is here to save.
I think for me as an investor, it’s where might these prices settle? Because then we can talk about the value in the miners because I know what you’re going to say, because I know at these prices, the miners are really, really, really cheap.
NNL: They’ve never been so cheap. So you keep pushing me for a price prediction. Well, I mean I like to avoid, but I’ll go there slightly. What I’ll say to is this, when when gold goes up, if we wanna say it, of course it’s not really doing that. It’s measuring how much your currencies are going down. What you tend to find is the trend is what you wanna watch. So whatever direction gold is moved, in sterling in our case, or dollars in the previous year, absent a change in policy. And I don’t think any of us are expecting that, then you should expect similar next year. Now that’s quite a big number. So if you work out what gold did last year, then I’m suggesting there’s nothing unreasonable. It’s suggesting a similar sort of behaviour next year. So I think that’s right.
Now the thing about silver, as you know, is the market’s kind of broken now. It’s sort of fractured into several different pieces. We’ve got different futures prices in different locations, different spot prices in different locations. You’ve got delivery failures. It’s when silver went from $120 to whatever it got all the way down to $75, you couldn’t buy silver at $120 or $75. So, you know, which is the only thing that’s annoying for the stacker that second set of people I mentioned is that would’ve be nice to have been able to buy 15 kilos of silver at $75. But of course there’s no silver to buy. [DM: No] So look, I think silver will do more than gold. The cat’s out the bag on that.
And you are right that the miners, I give you an idea of trying to explain this in a simple way. The profitability of the mining companies, they had 15% operate free cash flow margins eight years ago. So 15% of the 15 cents in a dollar is available for dividends and buybacks and merger and acquisition activity, et cetera. And they were trading on 1.5 times net asset value. Now they have 50% free cash flow margins. So that’s more than three times the margin. And they’re trading on one times. So they’re 33% cheaper now, but three times as profitable. So you are right that they are extremely attractive and really, you know, when we saw this big draw down in the spot, silver price or the future silver price, whichever way you wanna look at it the miners did not move nearly as much. Now that’s very irregular. And it tells you money comes a very attractive and also there isn’t hot money in there. So that, that means for me, the real excitement for the next year and two years finally is in the miners rather than the metal.
DM: Now outside of the Fed news Friday before last, there is, and you used the word, and you’re not the first person I’ve heard say this, but the silver market is broken. Let’s talk a little bit in the best as we can in layman’s terms about what’s in the foreseeable future. And colleagues far brighter than me tell me that there is four times as many future silver contracts to be delivered in March or rolled as there is silver in Comex, which is where it’s held in the States. Well, I mean if people call it then surely the silver price is off to the races. If because they just won’t have the silver t to deliver.
NNL: Well, look, it’s a complicated point because I think the key here is the overall market leverage. So what you are saying is that if everybody stood for delivery in March, there’s absolutely no way that it can be done. And that’s true and it does look extremely interesting and people like me have been waiting for this for over 20 years, by the way, the point at which this would happen. But I tend to think that the way things work nowadays, the idea of an outright failure is quite unlikely.
What you are more likely to see is a sort of series of rule changes and requirements and the fractured or broken market will we’re already seeing will just become more obvious in different places, bigger premiums being paid in different locations.
We are also seeing the same phenomenon of course in Shanghai. So in Shanghai, the stocks of silver that sit behind the futures market, there are also being drained. So there’s no doubt there is a rush for physical and a rush away from paper. The 24-year long gold and silver bug in me tells me that these things never happen on the date that you’re expecting them to happen. So I would tend to say it looks extremely interesting, but let’s actually get to that point before we before we start raising the bunting.
But what I will say is all of this drives you to think about two things. One is real metal ownership. So not owning a promise of silver, whether it’s futures, whether it’s unallocated silver, whether it’s the, a synthetic promise of silver. All of this is telling you you wanna do it properly, do it as well as you can because gold and silver are always about counterparty risk.
The reason you own gold and silver silvers, you’re worried about counterparty risk. And what you are saying is surely the counterparty risk is off rich to scale now. And the answer is it certainly looks interesting Darius, there’s no doubt about that. But it just drives me to want to be more of a stacker and own the metal and own the miners because the thing about mining companies is you’ve got one times clean ownership or the future stream production of a silver mine or a gold mine. And that is a very good clean way of representing ownership of what is a very financialised and paper structured market.
DM: So I think that’s a perfect segue into your fund and what you do. So I’ll simplify it then I’ll let you sort of expand. But Ned’s fund invests in physical gold and physical silver. And I would let you say a little bit on that versus potentially ETF or other vehicles. And then it invest in gold and silver miners and then moves the balance of those four depending on where we are in the cycle and his view on those assets. So maybe let’s just touch on the physical stuff first.
NNL: Yeah. So the best way to run physical gold and silver is not in my fund. It’s yourself. And the reason is because of what we just said, which is if you take delivery of physical gold and silver, you’ve removed all category risk and you’ve taken ownership yourself. Now accepting that’s not for everybody.
DM: I was going to say it’s not very practicable either.
NNL: No it’s not, but it’s an important point, which is if that’s your starting point, which is that’s something that one can do. But if you want to own it on the screen in whatever way or in a portfolio, there are myriad different ways you can express ownership of one times the gold price, one times the silver price.
And all that matters to me, therefore is worrying about the counterparty risk as, you know, my fiduciary duty to make sure we don’t have a problem there. So that leads me away from exchange traded products and towards what are called billion trusts, which is what we own in the fund. And they are listed on the New York Stock Exchange. So they’re covered by the Securities Act, the physical gold and silver is held outside the banking system. It is just a de-risking process.
Now, I feel the same way about mining companies, as you know, which is I don’t feel like I need to be in Africa or Central Asia or whatever. Now, maybe occasionally we miss something because we narrow our universe to what we call Tier one and Tier two jurisdictions, which can by the way also be spicy at moments. It everything about this space de-risk first be very, very focused on what might go wrong. Really think about that a lot. And then when you are comfortable with what your, the parameters that you can operate within are, and in physical gold and silver, in my view, it’s own bull and trust not exchange rated products, then you can start to add silver add development companies. Think about the overall spread of instruments you own.
DM: And do you own any of the royalty companies within gold or silver, the likes of Wheaton springs to mind?
NNL: We do own Wheaton Precious Metals, yes. I think that we’re entering an environment because as you say, they’re so profitable now, these companies, they have lots of cash. They don’t need to strike new deals with the likes of Wheaton. There’s a lot of capital available, there’s all the cash available. So I don’t think the market’s the same as it has been for the longest period where financial services businesses like Wheaton Precious Metal, which is what that really is, they lend short to a mining company for discounted production in the future. I’m not sure that the business model long term is this robust for growth as it used to be.
But yes, we have a slug in there and the good news about those companies is that they distribute their risk across, you know, a hundred or so individual streams of royalties rather than being a mining company with either one, two or eight different projects.
DM: So let’s maybe just go back to silver a little bit. Tell our listeners some of the uses the day-to-day uses that silver is used for. I mean, you mentioned the word conductivity, but what sort of industries? And let’s get back to boring commodities 101, which is the actual demand of the supply less the financial engineering that we’ve witnessed recently.
NNL: Sure. So most commodities have quite narrow use cases. The thing about silver is it doesn’t, it’s used in more or less everything that powers the modern economy because it’s the most conductive element. So people have heard that copper is conductive and copper is very conductive and it’s used in large construction projects, but silver is the most conductive element and it’s used in everything in the electronics and digital world. Indeed, that’s also why it’s used in solar panels because it’s so conductive.
So the thing about silver is it is with the exception of silver used in very, very small amounts in increasingly miniaturised products. So we’re in a world of hyper optimisation where everything is getting smaller and more efficient, and that means that silver is more and more vital to be used as a conductor whether it’s in a keyboard, in a tv, in anything in electronics, but also in in military equipment, in cars, in pretty much everything, Darius.
DM: Yeah. So again, I’ve known you a long time and I can sort of guess at the answer, but you are a believer that people should have gold particularly, but gold and silver as a consistent part of a portfolio throughout the cycle. But yet we have retail investors and you know, the commentary we write for all sorts of different people, it’s got very noisy. I just wonder with, you know, silver going from whatever it was, $115 to $125 and now settling, I used the word settling with a very small s at about the $80 mark and gold having gone from $2,000 to $5,000 — would have they missed the boat. You know, listeners to this podcast who maybe think I haven’t bought an allocation. Is there a FOMO aspect or no, don’t worry about the price rises. This should be a bit of your portfolio at all times.
NNL: Well, I think it should be, my opinion is it should be part of people’s portfolio at all times. The reason it’s not, it’s more to do with benchmarking and the way that you guys behave in terms of your benchmarking. But look, I think that the thing to think about in terms of a long-term allocation is gold is the principle reserve asset of the central banks and the state. It’s what they hold as their asset. And I find it quite interesting that investors portfolios are entirely dependent on the language of the central bank.
So if the central bank comes out with a word that wasn’t expected, the value of their assets, flies are all around the screen, yet they don’t behave the same way the central bank is. And central bank’s been adding gold solidly for 16 years now. It’s just been a kind of in about 17 now. It’s just been a relentless piling by the central banks themselves into this reserve asset. So I think it is a point worth considering, which is you’re listening or naturally your portfolio’s moving based on the language of a central banker. So potentially acting accordingly would be, you know, a sensible thing to do.
Now as to a answer, your question are you too late? I’m just going to refer to the point I made earlier, which is, unless you think that central bankers and governments are about to be disciplined effectively go from cutting and being accommodative in the monetary system to being hawkish and raising interest rates, then no, you’re not too late. It’s always that, it’s always to do with that. So it is a long cycle observation. Yes, it’s clear that gold and silver diversify, but short term the price of silver got overbought because of leverage. But as for these metals in people’s portfolios, short term overbought, but very clearly under owned at a portfolio level for investors globally.
DM: Ned, thank you very much. That seems like a natural place to draw to a close. If you would like more information on the Jupiter Gold and Silver, which is Elite Rated and run by Ned and his team at Jupiter, please do visit fundcalibre.com and as I’m sure my colleague will print, you know, nothing we’ve said here today counts, constitutes advice just to good healthy debate on what really has been probably near enough, the only story in town for the last three months. So, Ned, thank you very much for your time yet again.
NNL: A pleasure.
