This Week in Barrons: 02.08.2026

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The Precious Metals – in a nutshell…

• The Selloff in gold ‘n silver… was a result of Kevin Warsh (the new nominee for FED chair) being labeled a policy hawk, and triggering algo selling. Druckenmiller disputed the “hawk” label, but the damage had been done.  Warsh’s nomination is seen as pro-growth (tax cuts, refunds, and deregulation) – all aimed at boosting GDP

• The Inflation backdrop:  Pro-growth policies risk more inflation; but politicians continue to favor inflation over austerity.  Population demographics (more retirements, lower immigration, and fewer youth) worsen the debt dynamics.  After all, other than our FED printing mo’ money, who will pay-back our $37T debt?

• Watch Physical vs. Paper metals:  Paper silver fell to ~$75/oz while Shanghai Physical premiums jumped ~50%, keeping physical prices ~20% above paper, and still signaling tight supply.  China refines ~65% of global silver and heavily prioritizes domestic demand.  Higher production is not forthcoming, as gold output has remained flat for ~7 years – during which time gold prices have tripled.

• My Recommendations…

  o If you own gold/silver… hold it and use the pullbacks to buy more.

  o If you've been waiting to buy… this is your entry.  A technical selloff with record physical premiums and collapsed paper prices is the perfect time to buy.

  o If you think this is the top… Ask yourself whether anything has changed with our debt, deficits, demographics, supply constraints, or our FED printing money?  No – only sentiment has changed.  Sentiment is the worst guide for long-term decisions.

  o Opinion… I believe that gold ‘n silver will be higher in 5 years.  I wonder whether investors will have the conviction to hold through the volatility.

• Layoffs are rising… as U.S. employers announced 108,435 job cuts in January – up 118% YoY and 205% vs. December.  This was the weakest January hiring on record as firms continue to cite economic conditions and profit protection as reasons before AI.   Our politicians are starting to be concerned about the rising jobless claims.

• Weak hiring: January’s private payrolls rose only 22k (well below forecasts), and December was revised lower to 37k.  Manufacturing (after shrinking for ~2 years) lost 8k more jobs.  Gains in education and healthcare (+74k) barely offset the losses in professional/business services (-57k).

• Price Discovery for Metals: Traders are debating whether true pricing is being set in Shanghai, Mumbai, London, or New York, with clarity only expected by March contract expiration & deliveries.

• SaaS-pocalypse: Strong AI enthusiasm is pressuring traditional software stocks. Names like Salesforce, ServiceNow, Intuit, LegalZoom, Duolingo, and Chegg all sold off on fears of AI disruption.  Anthropic’s new legal AI tool intensified concerns surrounding the displacement of legacy software workers.

• Massive AI-agent activity on X… is blurring real vs. automated communication at an unprecedented scale.

• India is offering 0 taxes thru 2047… for all AI data centers built domestically.

• The first 0-DTE single-stock options launched… and 566k S&P contracts traded in the first 30 minutes.

• Deutsche Banks said… "Investor intentions in precious metals (PMs) have not changed for the worse. The underlying price drivers are central bank buying and ETF inflows. A 30% flush followed by a 9% snap-back, is institutional repositioning – not retail discovery.”

• Project Vault is a $12B reserve… built to counter China’s rare earth dominance.   When government’s stockpile critical minerals – prices follow.

• US – India trade: Beyond tariff cuts (25% to 18%), India plans to halt Russian oil purchases and buy $500B in U.S. goods.  This signals a geopolitical alignment.

• Lotus Health AI… is building a free, 24/7 AI primary care service (diagnosis, scripts, and referrals), with human physician oversight. The service is free, available 24/7, 50 languages, and licensed in all 50 states.

• Google plans to nearly double AI infrastructure spending… rattling investors – despite strong Cloud results, unsettling investors.

• Robotics: Chinese team enabled a Unitree G1 humanoid to skateboard using a physics-aware control system.

• MicroStrategy had the largest ‘single-day paper loss’ EVER … when BTC neared $60k last week. [FYI: The time to buy BTC is when leverage & liquidity go positive.]

• Altman on AI leadership:  Sam Altman floated the idea of eventually handing OpenAI’s leadership to an AGI capable of running companies.  The question is whether OpenAI’s execution and sprawling direction can keep up with Sam’s visionary claims.

• SpaceX acquired xAI… in a record M&A deal valuing SpaceX = $1T and xAI = $250B.  This aligns Musk’s space and AI efforts and aims to scale AI compute by launching data centers into orbit.

• Claude Cowork plug-ins: Anthropic added plug-ins to its non-coder desktop agent, enabling department-specific workflow automation.

• Claude Legal plug-in: Automates contract review, NDA triage, compliance, and briefings.  It does the job of an associate lawyer and poses yet another threat to the billable-hour model underpinning Big Law.

• AI disruption fears erased $300B+ in value…  from legacy software stocks like Adobe, Salesforce, Thomson Reuters, and LegalZoom.

• Q: Morgan what caused last week’s sell-off?

  Ans: The short answer is that a Hong Kong based prime broker used Japanese carry trade leverage across IBIT options, Binance, and precious metals.  After $19B+ in Oct. 10 crypto liquidations damaged the broker’s balance sheet, it doubled down on metals and took heavy losses (gold −11%, silver −31%) after the Kevin Warsh nomination. Fully underwater, it unwound on Feb. 5, driving record IBIT volume: $10.7B and $900m in options premiums.  The 13F filings drop on Feb. 14 and should reveal the player.

• Q: Morgan which chatbot should I use?

  Ans: The platform gap is narrowing.  ChatGPT’s U.S. mobile share fell from 69% to 45% YoY, while Gemini grew from: 15% to 25% and Grok rose from 2% to 15%.  The chatbot market grew 152% in 2025.  ChatGPT visits rose by 50% to 5.7B, while Gemini visits surged by almost 10X to ~2B. 

•  It’s an Uneasy Rally… despite a 1,200-point Dow jump and a 1.7% S&P gain.  The move was narrow, and driven by industrials, banks, and homebuilders.  Meanwhile, big tech and software lagged (i.e. Amazon finished down −8%, and it was software’s worst week since 2008).

• I saw market broaden with questionable rotation… as some divergent sector moves signal unhealthy breadth.  The statistical arbitrage firms (the ones who trade baskets of stocks expecting them to move together) had some of their worst trading sessions ever – as decades-long correlations broke down.  Beginning next week, I’ll be watching for market conditions to continue to broaden in the face of elevated risk moving.

• Fund managers are betting on anything (but cash).  It’s logical to see a fund’s cash level get run down during a bull market like this, but this time retail cash allocations have also reached their lowest level since the 2021 market peak.  With cash allocations at warning levels, this bull market broadening and bullish rotation theme had better be correct!

• This is a GLOBAL Equity Bull Market… that is moving from strength to strength. The rotation is not just within US markets, but also US-to-global. 

• Funds are finding their way into Emerging Markets (EM)… at a record rate.  Which begs the question: Is this too much – too fast.  Is the EM rotation over-cooked?  Sure, EM flows and sentiment are getting heated, but actual allocations are just thawing-out from investors being deeply underinvested in EMs.

   

• Factually: (a) Markets are deciding how broad this rally should be. (b) Investor cash allocations are at cycle lows and equity allocations are at cycle highs.  (c) Global vs US equities are at an inflection point.  And (d) despite some overheating, the Emerging Market equities have room to run.  Overall, per Callum Thomas: While last week saw some particularly turbulent price action within metals & tech (software slumping because of AI threats), we’re also seeing further progress the bull market broadening.  Rotation is currently the theme.

  Trading TIPS:

  • Tip #1: During a downturn in Bitcoin… BUY MSTZ!  [FYI: It is the double-inverse of (Micro)Strategy.]

  • Tip #2:  BUY Bitcoin near ~$50k … sell it near ~$100k.  Rinse ‘n repeat. Because Gold typically leads Bitcoin under low liquidity situations, and Bitcoin outperforms Gold when liquidity expands.

  • Tip #3 to #6 = BUY VZLA (small silver miner), ATXRF < $3.15 (small copper & gold miner), COPX (copper miner), and ILF (the South American Emerging Markets ETF).

   

  HODLs: (Hold-On for Dear Life)

• Holding / Reducing:

  o (-) Ethereum (ETH = 2,050 / in at $310)

  o (-) Bitcoin (BTC = $70,500 / in at $4,310)

  o (-) IBIT – Blackrock’s Bitcoin ETF ($40 / in at $24)

•  Increasing:

  o  (+) Physical Commodities = Gold @ $4,988/oz. & Silver @ $77/oz.

  o (+) SLV (silver ETF) == ($70.2 / in at $27)

  o (+) GLD – Gold ETF ($455 / in at $212)

  o (+) GDX (gold miners) == ($97.4 / in at $52)

  o (+) COPX (copper ETF) == ($84.6 / in at $55.3)

  o (+) CCJ (uranium) == ($113.6 / in at $84)

  o (+) ILF (EM for S. America) == ($36 / in at $27.8)

  o (+) ATXRF (small copper & gold miner) == (2.96 / in at $2.47)

  o (+) QQQI (13% covered-call, QQQ’s divi. producer == pay mo.)

  o (+) ICSH (short term bonds = 4.65% yield == pay mo.)

   

  - Temp. Hedges:

  o (+) HTZ (Hertz) == BOT 20 Feb: $6 Call

   

   

  Please be safe out there!

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