In this episode of The Market This Month, Anna Serin of the Canadian Securities Exchange and Bruce Campbell of Stonecastle Investment Management examine the forces shaping markets as the year unfolds.
Precious metals remain a central theme, with elevated gold and silver volatility reflecting repositioning rather than weakening fundamentals. While price swings have intensified, capital formation in the resource sector remains strong, reinforcing confidence in a potentially developing multi-year commodity cycle.
The discussion also explores broader market rotation — both sector and capitalization. Leadership is shifting away from mega-cap dominance toward energy, industrials, small and mid-caps, and regional financials.
Meanwhile, Stonecastle’s top-down dashboard signals a transitional environment, with early warning indicators flashing caution for mega caps while smaller market capitalizations continue to strengthen. As earnings season unfolds and major resource conferences approach, investors are watching closely for confirmation of sustained economic momentum and capital flow trends.
Watch the video above, or read the full transcript below.
Silver Swings, Capital Rotates, and Opportunity Emerges
Anna Serin: Welcome to the February edition of The Market This Month. I’m Anna Serin, Director of Listings Development with the Canadian Securities Exchange, and I’m joined by my co-host, Bruce Campbell with Stonecastle Investment Management.
On today’s episode, we’re unpacking what’s driving markets right now — from gold and silver volatility to sector rotation, capitalization rotation, and what our top-down dashboard is signaling as we move further into 2026.
Gold and silver have continued to experience meaningful price swings as markets digest shifting rate expectations, currency movements, geopolitical tensions, and broader risk sentiment. Silver, in particular, tends to amplify volatility because of its dual role, both as a monetary metal and as a critical industrial input tied to electrification, solar, and advanced technologies.
Volatility can feel uncomfortable, but often it reflects repositioning, not weakening fundamentals.
We’re also seeing broader sector rotation underway. Capital continues to move between defensives and cyclicals, between technology and real assets, and increasingly across different market capitalizations.
That brings us to capitalization rotation, where flows between large caps and juniors are creating selective opportunity, particularly within Canada’s growth markets.
Our top-down dashboard tracking breadth, relative strength, momentum, and volatility suggests we’re in a transitional environment. It’s not broadly risk-on or risk-off — it’s selective. Capital is flowing with purpose.
At the Canadian Securities Exchange this month, we welcome several new listings: Alaros Exploration Inc., Titan Tek Corp., Redwood AI Corp., Maximus Metals, and Bahia Metals Corp.
These additions span exploration, metals, and AI-focused technology, reinforcing that companies across sectors continue to access the public capital markets.
We also witnessed a strong start to 2026 in financings across all sectors, many oversubscribed with meaningful international participation from U.S. and global investors.
Two silver financings this month tell a deeper story about sector support beyond short-term price charts.
Kuya Silver Corporation completed a roughly $25 million financing to support expansion initiatives at its Bethania silver mine in Peru, including increased processing capacity. This is operational growth capital, funding infrastructure and scalability, reflecting investor confidence in long-term production economics.
Meanwhile, Pacifica Silver Corp. announced on January 23rd that it closed financings totaling over $23 million. Proceeds will advance exploration and development at its flagship silver project in Mexico.
Raising over $23 million in a volatile metals environment, particularly at the exploration stage, is meaningful. It demonstrates that institutional and strategic capital continues to back the silver pipeline, not just current production.
So while silver prices may move sharply from week to week, capital formation in the sector remains active. That distinction matters. Volatility in price does not necessarily signal a lack of conviction, and these financings suggest the opposite: sustained belief in silver structural demand and long-term fundamentals.
Today, Bruce and I will break this all down. We’re going to start off by talking about precious metals. I feel like there’s no episode that we’ve had over the past year that we haven’t talked about this, and we’ve seen some volatility in gold and silver. Tell us what we saw this month.
Bruce Campbell:
We tend to go in themes, don’t we? It was Fed, Fed, Fed, inflation, inflation, inflation, then it was gold, gold, gold, and we keep on that theme.
We’ve seen such a move in precious metals over the last 24 months. Something we noticed at the beginning of the year in January is that we started to see the volatility of both gold and silver perk up.
When I’m talking about volatility, I’m not referring to price volatility. I’m specifically referring to the VIX for gold and the VIX for silver that the Cboe in Chicago puts together.
If you look at what we were seeing with gold, as the price was rising to that new high above 5,000, we were seeing volatility go up as well. When it hit that top and had some fairly significant one-day declines, that shouldn’t have come as much of a surprise given the underlying volatility.
When volatility starts to rise like that, we expect the days to be bumpier. As long as the trend remains intact, we’re comfortable being there.
If you’re adding to positions, there are two ways to look at it. If you’re comfortable with volatility, you can add on down days. If you’re more cautious, you can wait for volatility to come down before adding. We haven’t seen that yet. It’s something we’re watching for our own portfolio.
Volatility levels have been a couple of standard deviations above where they normally sit.
Anna Serin:
We’ve seen a steady increase in commodity prices over a short period of time. Is this natural volatility when you see that much of an incline?
Bruce Campbell:
Yes. If you look at gold and especially silver from October through January, it really went exponential.
When that happens, you tend to get late participants entering the market. They can be quick on the trigger when prices pull back, which intensifies volatility. It’s often a function of being overextended.
Typically, you see chop around while volatility remains high. It moves up and down without a clear direction. At some point, volatility comes down and the trend resumes to the upside.
If you look at past commodity cycles, they can be extremely challenging to hold. Charts look easy in hindsight, but markets try to make it difficult. Commodities can have 10–15% drawdowns, sometimes more, even during multi-year bull markets. Underlying stocks can be even more volatile.
Anna Serin:
We continue to see new companies coming to market and large financings. The volatility doesn’t necessarily mean it’s time to leave the resource sector, right?
Bruce Campbell:
No. Commodity moves tend to last a long time. If you look at longer-term cycles, there’s a strong case that a new commodity cycle has started.
These cycles tend to last 15 to 20 years. The last one ended around 2011 or 2012. We’re bumping up against that 15-year period where financial assets outperformed.
There’s reason to believe we’re two or three years into a new commodity cycle. If it has that 15 to 20-year life, there could be multiple years left in what could be a significant cycle across commodities.
Anna Serin:
Remind our audience what sector rotation typically signals.
Bruce Campbell:
In a bull market, it’s healthy for leadership to change.
After the 2022 bottom, technology led. I’m not saying technology is dead, but there appears to be rotation out of larger cap tech stocks into other areas.
Healthcare picked up in the U.S. last year. Base and precious metals have done well in Canada. Energy continues to perform well in both Canada and the U.S.
Transportation stocks — airlines and trucking — are making new highs. Regional banks in the U.S. are accelerating, while money center banks are going sideways.
Rotation is always there. Some investors overweight sectors that are showing strength.
Anna Serin:
Would you say these moves signal economic strength?
Bruce Campbell:
Yes. In 2022, we didn’t see an official recession, even though the market was down 20%. I believe we had a manufacturing and industrial recession.
Now we’re seeing industrial companies perform well, regional banks accelerate, trucking and airlines strengthen. That suggests the economy is improving and we’re seeing synchronized global growth.
Anna Serin:
Where is capitalization rotation creating opportunity?
Bruce Campbell:
We’re seeing rotation from mega caps into small, mid, and large caps.
In 2023 and into 2024, mega caps had earnings growth around 50%. That rate of change has slowed. Small and mid caps had negative earnings growth during 2023–2024, but around June last year that shifted.
Now we’re seeing accelerated earnings growth in small and mid caps. Our dashboard shows mega caps deteriorating, while small, mid, and large caps are seeing capital inflows and stronger performance.
Year-end 2025 earnings are being reported now. Reporting begins in early February and runs through February and March.
During this period, companies provide guidance, which helps investors assess the path forward. Those aggregated results drive sector and capitalization movements.
Our Early Warning Indicator recently turned negative for the Magnificent Seven, the S&P 500, and the Nasdaq.
However, the Russell 2000 and Canadian markets remain positive.
This aligns with the rotation theme — from mega caps into smaller caps.
We don’t take immediate action on the Early Warning Indicator, but it serves as a yellow light to remain aware of potential shifts.
With PDAC approaching in early March, we expect new ideas to emerge and increased attention on resource companies.
Earnings trends and financing activity will also be key to watch as companies plan summer programs.
Anna Serin:
I look forward to seeing you next month. Hopefully in person.
Bruce Campbell:
Sounds like a great plan.
Anna Serin:
Thanks again, Bruce. Always great chatting with you.
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