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Mike Larson & Dan Steffens - Are Gold and Silver Out of Purgatory? Plus High-Upside Energy Stocks

The KE Report Aug 22, 2026

Summary

Precious metals' rebound looks like a lasting turn after the 2025 blow-off, supported by global bond interventions signaling dollar debasement.

The Treasury doubling long-bond purchases and helping Japan intervene in yen reinforce gold and silver as hedges against currency weakness.

Government-led critical minerals investment is creating a multi-year tailwind for resource equities, including rare earths, uranium, and copper tied to AI infrastructure.

Energy stocks are outperforming crude oil because refinery damage and supply-chain disruptions will take 12-18 months to fully rebalance.

Small-cap and mid-cap oil and gas names with clean balance sheets offer compelling valuations, including Baytex, Crescent Energy, Matador, and Devon Energy.

Dan Steffens's takeaways

  • Top takeaway Dan argues oil has to keep creeping higher because roughly 14% of global refining capacity is offline, including Middle East damage from Iranian drones and Russian infrastructure damage from Ukraine
  • The guest frames the U.S.-Iran conflict as a "battle for the Strait of Hormuz" that won't end before the midterms or year-end, with a 12-18 month rebalancing window even if a deal is reached
  • Dan is constructive on small-cap oil and gas producers trading below book value with pristine balance sheets and free cash flow, highlighting Baytex, Riley Exploration, Rubellite, Rok Resources, and Calibre Global Energy as standout picks
  • The guest argues against hedging at current levels, notes the front of the curve is over $80 through December (signaling a current shortage), and sees Cushing inventories near 21M barrels versus 80M capacity as evidence of tightness
  • Dan warns that U.S. SPR caverns risk damage if drained further, with 5.3 million barrels pulled last week, and notes Western Canadian gas prices "still stink" even as NGLs have firmed

Mike Larson's takeaways

  • Top takeaway Mike frames the precious metals pullback as a healthy digestion of the 2025 blow-off rather than the end of the bull market, calling the past several months "purgatory" rather than a bear market
  • The guest argues Treasury Secretary Bessent's plan to double purchases of long-term bonds - what he dubs "Bessent versus the bond market" - signals a step toward dollar devaluation and supports owning gold and silver
  • Mike sees GDX holding the 70-75 zone as the durable low, with an ideal scenario being a pullback to the mid-$80s on lighter volume before a confirmed second leg up
  • The guest says some generalist "hot money" has rotated from precious metals into copper, critical minerals, rare earths, and uranium, but maintains the broader commodity complex still looks solid
  • Mike argues XLE hitting new highs while oil hasn't is bull market behavior, and that sector rotation - with energy, financials, and industrials picking up - is healthy even if tech and chips take a breather

Sue Riddell Rose's takeaways

  • Top takeaway Dan describes Rubellite Energy CEO Sue Riddell Rose as a very good speaker who has historically under-promoted the company but recently agreed to do a client webinar and is slated to appear at an upcoming Calgary conference
  • The guest implies Riddell Rose's low public profile is part of why Rubellite still trades at a discount to his valuation despite being his top performing small-cap holding