Gold and Silver Projection | Ask the Expert with Tavi Costa

·23 min·2 clips

Tavi Costa argues the dollar trade will be 2025's most important investment idea as it looks extremely peaky and overvalued.

The episode begins with host Craig Hemke introducing Tavi Costa, a partner at Crescott Capital, as the guest for the December Ask the Expert segment. Hemke notes it's December 2024 and mentions holiday shopping promotions for Sprott Money. Costa explains his role at Crescott, focusing on macro analysis and precious metals investments. Hemke sets up the discussion by highlighting the dollar's strength in 2024 and gold's performance despite higher rates. Costa identifies the dollar trade as the most important investment idea for 2025, calling it overvalued and overpositioned. He predicts a decline in the dollar versus other fiat currencies, which could unleash trends in gold, emerging markets, and resource companies. Costa references historical dollar cycles and the dollar milkshake theory. Hemke asks about fiscal and monetary policy drivers for dollar weakness. Costa discusses American exceptionalism, U.S. equity valuations being six to seven times more expensive than the rest of the world, and capital flows to cheaper markets like Japan and India. He emphasizes Scott Bassett's nomination as Treasury Secretary, noting Bassett's views on monetary realignment and gold as his largest hedge fund position. Costa suggests the Trump administration may pursue both reserve currency status and a weaker dollar. Hemke shifts to the mining sector, asking about share performance lagging physical metals. Costa uses a surfing analogy to describe sequential waves: gold first, then silver and other metals, followed by emerging markets, and finally speculative interest. He mentions increased M&A activity and competition for private mines. Costa links mining to U.S. economic risks, noting mining's decline from 20% to 0.3% of GDP. Hemke contrasts the GDX's $14 billion market cap with tech stock gains. Costa reiterates that dollar weakness and central bank gold buying are key drivers for mining sector interest. He concludes by discussing Crescott's funds and his dollar cycle report. Hemke wraps up with holiday wishes and a preview of a year-end episode with Santa.

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