Silver’s ‘great rotation’ Tech selloff to fuel rush into precious metals, says Jen Bawden

In an exclusive commentary to Kitco News, Jen Bawden, founder and CEO of Bawden Capital, said investors are underestimating the economic pressures building across global markets, particularly in energy, agriculture, sovereign debt and private credit.

“The Great Rotation from overvalued tech to metals and commodities is about to begin,” she said.

Although investors continue to celebrate equity markets trading near record highs, Bawden said she sees growing risks beneath the surface.

“I’ve been trained for years to hunt for black swans and analyze what the bulls have overlooked,” she said. “It’s a fool’s errand to call the top of a market, but I believe we are almost there. To the average investor, this looks like a breakout. To me, it looks like the final gasp of a market built on very shaky pillars.”

Bawden said one of the biggest drivers for precious metals is the ongoing strength in energy prices tied to the conflict with Iran and disruptions in the Strait of Hormuz. Although rising inflation fears have weighed on gold and silver in the near term, she said investors should focus on the broader backdrop of economic uncertainty and tightening supply conditions.

Oil prices above $100 a barrel are not only fueling inflation but also increasing production costs for miners and manufacturers.

“It pushes silver and gold higher because higher oil prices boost mining costs by constraining supply,” she wrote. “High oil prices add to economic uncertainty, prompting investors to move to silver and gold, providing a further floor for prices.”

She added that inflationary pressures tied to rising food and energy costs are likely to keep central banks in a difficult position, and could limit the Federal Reserve’s ability to aggressively cut interest rates even if economic growth deteriorates.

“As long as energy and food costs stay this high because of the war, inflation will not go down,” she said.

Bawden noted that newly appointed Federal Reserve Chair Kevin Warsh faces a difficult balancing act as he attempts to support the banking sector while tightening overall financial conditions through balance sheet reduction.

“Kevin Warsh ... is expected to cut short-term interest rates to save the commercial banks from collapse. However, he will also shrink the Fed's balance sheet, which means he is pulling physical cash out of the stock market,” she said. “This is bullish for physical silver, gold, large banks with strong reserves and domestic commodity producers.”

Bawden argued that shrinking liquidity could eventually trigger a broader flight into hard assets.

“When the paper assets (stocks/bonds) start to evaporate and banks look shaky, people stop caring about the dollar index and start caring about survival assets,” she said. “In a world swimming in debt, gold and silver rise because they are the only things that aren't someone else's bad debt.”

She also pointed to growing stress within global credit markets as another factor supporting precious metals. According to Bawden, rising bond yields are placing increasing pressure on highly leveraged companies and private credit markets, creating the potential for broader financial instability.

“This is a hidden financial disaster ... just starting to surface,” she said, referring to mounting strains in the private credit sector.

Bawden added that 30-year Treasury yields holding above 5% pose a significant threat to high-growth technology stocks.

“When this rate stays above 5%, the math for high-valuation tech companies like Tesla or Nvidia breaks,” she said. “Their value is based on money they will make years from now. When interest rates are this high, profits a decade away are heavily discounted.”

Beyond financial markets, Bawden said geopolitical tensions and commodity shortages are also creating a supportive backdrop for precious metals. She highlighted disruptions in fertilizer markets, helium supplies and global trade routes as additional risks that could intensify inflationary pressures across the global economy.

“When people are scared of starvation and high prices, investors sell their tech stocks and buy real stuff like silver and gold to make sure their wealth doesn't disappear when food prices go vertical,” she said.

Bawden also warned that sovereign debt concerns and currency pressures in emerging markets could reinforce long-term demand for precious metals. She noted that India’s recent efforts to curb gold and silver imports reflect broader concerns surrounding weakening currencies and capital preservation.

Her broader thesis centers on what she describes as a major shift away from highly valued technology stocks and toward hard assets and commodities.

“The risks listed above will pull down overvalued tech stocks with crazy high valuations and create a great rotation into commodities and real assets like silver and gold,” she said.