Gold got burned by oil
You would think a war that keeps getting worse is good for gold. This week showed it doesn't always work that way.
Hormuz is having its worst month yet
October is now the worst month on record for attacks on ships in and around the Strait of Hormuz. One think tank counts 28 attacks this month and 113 since the war started on 28 February (Reuters via US News). A container ship sank on 14 October, and Iran claimed it hit a naval mine (CNBC).
The strange part: oil is still getting out. Tankers sail through with their trackers switched off and hand their cargo to other ships in the Arabian Sea (USNI News). Reports this week even say Gulf oil exports are back above pre-war levels (The War Zone). So the oil keeps flowing, it's just a lot more expensive. Brent sat around $113 a barrel on 23 October (Straits Daily Brief).
From oil to gold in four steps
This is how a tanker getting hit ends up in your gold position:
Oil goes up. Every attack adds a few dollars to a barrel.
Inflation fears go up. Expensive oil makes everything more expensive to move and make.
Rate-hike bets go up. The Fed already hiked in September, to 3.75-4.00%. Markets now worry it has to do it again.
Gold goes down. Gold pays no interest. When rates rise, cash and bonds look better and gold looks worse.
That chain hit hard on 22 October. Spot gold fell about 2.4% to roughly $4,041 an ounce, a two-month low (RecoupRev, citing Reuters). Silver had it even worse, down around 10% for October (Business Today).
The miners felt it the same day. Skeena, which is building what it calls one of the world's highest-grade open-pit gold mines and put out no news, dropped 9.7%. When gold swings, investor sentiment swings with it. Companies that don't produce gold yet get hit hardest, because their whole value is gold they'll only mine years from now.
The other side of the coin
In fairness to gold bulls, this cuts both ways. Markets put the odds of the Fed holding rates on 28 October at around 86% (GoldSilver). A hold takes away the main reason for this sell-off. And a real escalation, not just another tanker, could flip gold back into its safe-haven role overnight.
As long as Hormuz pushes oil up without shutting it off, gold stays stuck between fear and interest rates.
The rare earth clock is ticking
On 10 November, China's one-year pause on its toughest rare earth export rules runs out. As of mid-October, Beijing had not published anything to extend it (Technology.org).
What's actually on the line
These are the rules China announced in October 2025 and then put on ice after the Trump-Xi meeting in Busan. If they come back, they cover:
Five more rare earths added to the export licence list.
Lithium batteries and graphite anodes
Products made outside China that contain Chinese rare earths or were made with Chinese technology. That one reaches into factories all over the world.
Washington says the truce was extended to 10 January 2027. Beijing hasn't put that in writing yet. Two weeks before the deadline.
The pause never meant normal
Even with the truce, China's rare earth exports fell 9.6% in the first nine months of 2026, to 43,711 tonnes (same source). Companies have noticed. TSMC, the world's biggest chipmaker, is asking its suppliers for factory motors that contain no rare earths at all (Seoul Economic Daily, citing Reuters). If a company that big is already working around China, they clearly don't expect this to go away.
Why this matters for miners
Let me be clear: I have never been positive on the rare earth miners. Most of the money that went into them was trend investing, not value investing. People bought the story (China, export controls, national security) and paid for headlines instead of cash flow.
The real choke point was never digging rare earths out of the ground. It's processing them. Western miners can find the rock, but most of them still have to send it to China to turn it into something useful. That makes these export rules a risk for the miners, not a selling point.
The bull case is real too. Every new restriction makes buyers more willing to pay for non-Chinese supply, and governments keep writing cheques to build it. But if a miner has nowhere outside China to process its rock, those higher prices don't do much for it. At best that's a reason to own the very few that can actually produce and sell, not the whole sector.
Case in point: Brazilian Rare Earths
If rare earths are this strategic, you'd expect Western rare earth miners to be flying. Brazilian Rare Earths (ASX: BRE) shows it doesn't work that way. The stock went from a top of around A$7 to A$1.725 at Friday's close. Half of that value disappeared in just the last three weeks (The Bull).
This is what it looks like when a trend unwinds. At A$7, people weren't paying for cash flow, because there won't be any until 2031 at the earliest. They were paying for the rare earth hype. Once the story ran into a lawsuit, a shrinking cash pile and a five-year wait, the share price got hammered. I don't expect BRE to be the last one.
The project itself isn't the problem on paper. Its early study puts the Monte Alto project at a value of US$6.0 billion, with first production in 2031 and about US$969 million needed to build it (Kalkine). It even has its own pilot processing plant running since September, which is exactly what I said most miners are missing.
Damned if they do, damned if they don't
Europe keeps saying it wants to spend more on defence. This week showed the two things standing in the way: countries that can't really afford it and cheap money that nobody wants to take.
France's 10-year borrowing cost climbed to 4.96%, after touching 4.99% in early October, the highest since 2002. France now pays about 1.5 percentage points more than Germany to borrow, the biggest gap since the euro crisis of 2011 (Reuters via Euronext).
The streets aren't helping. Cost-of-living protests turned into riots on the weekend of 17-18 October, with a tourism office set on fire in Lyon (Fortune). Bond yields jumped the Monday after, and another round of protests was called for Saturday 24 October. Meanwhile debt sits at about 119% of GDP, and interest payments alone come to around €79 billion this year and €91 billion next year (BigGo Finance).
Defence spending should always stay a big priority, especially now. But France is stuck between a rock and a hard place. Cut defence and you weaken Europe at the worst possible moment. Keep borrowing for it and the bond market punishes you even harder.
To be fair, the Banque de France governor still says getting the deficit back to 3% by 2029 is possible (CNBC). I don't buy it. As long as there are no structural changes in how the French government spends money, I'm very negative on their fiscal outlook. And since that change might never come, I expect France to eventually come asking for a bailout from countries like the one I'm from, the Netherlands.
Cheap money, no takers
The EU's €150 billion SAFE fund lends money to member states for defence at better rates than most of them could get on their own. About €20 billion of it is still unclaimed, after Italy and Hungary reportedly cut their requests. Brussels is now looking for countries to take the rest, but Romania, Latvia and Estonia may not be able to borrow more because of their public finances (UA News, citing RMF24).
The fact that the full amount wasn't taken up says a lot. Countries are still wary of spending too much on defence. Some are probably also afraid of pouring money into projects that amount to nothing, or of spending just to spend. If that's the reason, I'd rather they spend less and more slowly than spend a lot and waste most of it.
Gold bruised, copper booming, nickel still sick
Gold: bruised. Around $4,041 an ounce on 22 October, a two-month low (see above). It's still a very high price for a miner to sell at. It's just well below its January peak.
Copper: near the top. About $14,441 a tonne on 21 October (Reporte Minero), close to the 2026 record of $14,850 set in August (Farmonaut). The warning sign: the industry's own study group expects more copper than buyers need this year and next (PrimeXBT, citing ICSG).
Nickel: still flooded. About $15,600 a tonne in early October and down roughly 7.5% in a month (cnyes). Indonesia keeps flooding the market, and nobody is turning that tap off.
Lithium: round trip. Chinese lithium futures closed around $15,650 a tonne on 12 October, about half of their May peak (same Farmonaut source). South American lithium was at $16.05 a kilo on 20 October (Reporte Minero). That's a big swing in five months. Anyone who raised money near the top in May is feeling that now.
Company updates:
Empress Royalty
On 19 October Empress closed its US$62 million deal for a gold stream on the Tongon mine in Côte d'Ivoire (Empress). For my non-mining readers: a stream means Empress pays cash upfront and in return gets a share of the mine's gold for decades, for almost nothing per ounce. In this case Empress gets 3.58% of Tongon's gold until 400,000 ounces have been delivered, then less after that, for about 29 years. It pays just 0.5% of the gold price for each ounce it receives.
The money mostly came from a loan, not from selling new shares. Empress drew US$55 million of a US$75 million facility from Appian and paid the rest from its own cash. It also raised its 2026 guidance to 8,000-8,500 gold equivalent ounces, up from 7,045-7,430.
Almost no dilution is a good thing here, but it isn't zero. Appian got warrants for about 2.2% of the company as part of the loan. On top of that, the advisers were partly paid in shares, and most of those went to Endeavour Financial, where Empress's own executive chairman is a director. It's disclosed and it's small, but it's worth knowing.
The bigger downside is that part of the cash flow now goes to paying off the loan instead of to the company. As long as gold stays where it is, this is the smart move. If gold keeps sliding like it did this week, that loan gets heavier.
Serabi Gold
Serabi cut its 2026 guidance. It now expects to produce about the same as in 2025, instead of the 53,000+ ounces it promised (Serabi Gold release). Q3 came in at 11,008 ounces, down 9% on last year, partly because of lower grades at its Palito mine. The bigger reason: the permits it needs to ramp up its Coringa mine still haven't arrived.
I don't see this as a huge issue. Serabi has no debt and US$63.2 million in cash, and it paid its first dividend in July (same release). It won't turn unprofitable over this, not for now. But further delays will start to eat into profits, and Brazilian permits have a habit of taking longer than promised.
Axo Metals
Axo hit 48 metres of 1.18 grams of gold per tonne starting right at surface, at a new target called Luz del Cobre about 750 metres from its existing pit. It also hit 15 metres at 3.94 g/t (Axo Metals release). Gold near surface and near a plant is about as cheap to mine as it gets. In the same release, Axo walked away from part of its La Huerta copper project, though it keeps the concession where nearly all the drilling happened. It also got a US listing (OTCQB: AXOCF) on 21 October.
Honestly, this isn't the story I bought into. I came for the high-grade copper. But the team behind it has a good track record, so I'm following along to see where this ends up.
NorthWest Copper
More strong drilling at Kwanika this month, including 110 metres at 1.86% copper equivalent (copper and gold added together as if it were all copper) (NorthWest Copper release). What's still missing is the updated PEA (the first rough study of whether a mine would make money). It was promised for mid-2026, then "in the coming weeks" back in August (NorthWest Copper release). It's now late October. I'll take better numbers over faster numbers, but I want a date.
Sarytogan Graphite
Sarytogan (ASX: SGA) released the first of two planned DFSs on 21 October (the definitive feasibility study, the most detailed study a company does before deciding to build). It covers the mine and the plant that turns rock into graphite concentrate, at 50,000 tonnes a year (Sarytogan ASX announcement).
The headline numbers: a value of US$132.7 million before tax, a 19.8% return, and US$80.5 million to build it. The grade is what makes this deposit stand out. The reserve is 14.5 million tonnes at 29.1% graphite, and the mine plan runs for over 50 years while using less than 4% of the total resource (same announcement). For comparison, most graphite projects are happy with single digits.
Two things are still open. There's no funding and no offtake deal yet (a contract with a buyer for the product). And the plant would be built by Chinese engineering firm Yantai Jinpeng on a fixed-price quote. That keeps the cost down, but it's a bit ironic for a project that sells itself as non-Chinese supply. The second study, for turning the concentrate into battery material, is still to come.
Sarytogan might become an interesting name in the future. But with graphite prices where they are today, I think it should focus on the copper side of the business first. It's already exploring for copper at Baynazar. In a few years the graphite project could be more profitable, and a lot easier to finance.
For full disclosure: I may hold positions in some of the companies mentioned. Nothing in this newsletter is financial advice.
That's it for this Maric's weekly.
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Stay safe,
Maric
