March monthly letter | “Grand corruption”

The past few weeks have been eventful. While macroeconomic uncertainty and geopolitical tensions still shape the markets, interest in precious metals and electrification-related commodities continues to grow. In this month’s letter we look at recent market developments and the most important events for us lately.

Au and Ag in the past month

Gold closed the month at USD 5,277 (4,833), an increase of +9.2%. February also ended with gold at its highest monthly close ever, only USD 317, or 6%, below its all-time high of USD 5,594 per troy ounce.

Silver rose again during February and reached USD 93.87 (85.19), a further gain of +10.2%. After the strong start to the year, silver is now up +31.6% year-to-date.

Silver has had a dramatic ride this year. It started at USD 71.31, climbed to USD 121.31, and then fell to USD 65.20 within a week. Over the past three weeks, however, the price has begun to rise again. The USD 28 rebound from the February low brought silver back to USD 93.87, the highest monthly closing price ever recorded.

Given the uncertainty in the world right now, we should expect very volatile price movements. Double-digit gains and losses within a single day may become more common. So fasten your seatbelts, or use the volatility to your advantage if you prefer. Regardless of short-term moves, the long-term investment case has not changed. If anything, it has grown stronger.

The Gold:Silver Ratio at month-end was 56.2 (56.7). Although silver has outperformed gold, we are still far from our interim targets of 45 and 30:1. Over the longer term we expect both a much higher gold price and a ratio that could fall below the natural relationship of 16:1. In this “bull market without end”, we even see the potential for a Gold:Silver Ratio at or below 10:1. 

With these new commodity price levels, mining companies are seeing higher profits with each passing quarter. A trend we have long expected is now starting to appear. Several companies are beginning to act more like price makers rather than price takers. Some have sold silver at prices well above the average silver price during the fourth quarter. Companies are offering buyers (including countries) silver at prices above the official market price, and there are clearly buyers willing to pay a premium to secure supply. This is a very interesting development and may signal a shift toward miners having greater pricing power.

We repeat our message about mining companies in what is shaping up to be a very exciting 2026:

Despite strong gains during 2025, mining companies are actually cheaper today from a valuation perspective. If gold and silver prices continue to rise in 2026 — or even remain at current levels — there is significant potential for strong share price gains, since today’s commodity prices are still not fully reflected in mining stocks.

The AuAg funds - Highlights

Once again, AuAg Silver Bullet delivered the highest return among the AuAg funds (it was, in fact, the top performing fund in the market). However, we would also like to highlight AuAg Precious Core (formerly AuAg Precious Green), which has received a strategic update.

The fund adjusts several sub-strategies to increase exposure to electrification metals such as copper, silver, and uranium. In addition, the target weight of each holding has been changed from 3% to either 4% or 2%. The “Enabling Metals” strategy increases from 15% to 20% (+5%). The “Create Energy” strategy also increases from 15% to 20% (+5%), including expanded exposure to solar energy 10% (+1%) and nuclear energy 10% (+10%). Exposure to other energy companies is reduced to 0% (–6%).

All holdings within the “Storage” and “Efficiency/Recycling” strategies move from a 3% weight to 2%. As a result, each of these strategies declines from 15% to 10%, for a combined allocation of 20% (–10%).

With 60% invested in companies that enable electrification and 40% allocated to physical precious metals (mainly gold) for strong portfolio protection, the result is an innovative portfolio designed for the future.

AuAg Precious Core was recently nominated by Hedge Nordic as one of the five finalists in the category “Best Nordic Equity Long-Only Hedge Fund 2025.”

A new war has begun. We are seeing signs of a new world order where political leaders may be captured or killed. This sets a worrying precedent for future events. No one appears completely safe anymore.

Before commenting on the war in the Middle East, we want to address events in Mexico, which have recently received less attention. The deaths linked to the unrest are tragic. It hit us extra close that one of our holdings, Vizsla Silver, was affected.

Vizsla holds strong assets, but they are located in regions where drug cartels are active. In the past, the cartels were relatively united and focused mainly on drug trafficking, which is far more profitable for them than other activities. Recently, however, the cartels have split into smaller rival groups. This has created internal conflict and competition.

Some weaker groups have tried to raise money for weapons through kidnapping and extortion. Vizsla was affected by such an incident. When the impossible demands could not be met, the hostages were murdered. Mexico deployed more than 10,000 soldiers and special units to find those responsible.

Another powerful cartel leader has since died as Mexico, with some support from the United States, tries to restore control. This has led to more unrest and fragmentation, which may cause further incidents in the near term. In the longer run, however, we see it as positive that these issues are coming to light and that cartels may no longer operate as freely as before.

The theme of this month’s letter is “Grand Corruption.” This term refers to corruption at the highest levels of society, where people in power often feel untouchable. Even though it receives surprisingly little coverage in major media, we are now seeing a period where many such figures are falling from grace.

Corruption in arms deals has existed for decades. One well-known example is the Bofors scandal in India. It is also troubling when companies such as Ericsson contribute millions to Donald Trump’s inauguration ceremony, while ordinary people risk legal consequences for accepting even small gifts.

There are also other ways to influence decision-makers besides direct bribes. Some people arrange ultra-luxury events and may even offer sex, drugs, or other compromising situations to gather damaging information. This material can later be used as blackmail to influence political decisions.

The Epstein scandal is a clear example. Several powerful politicians and major business figures have been linked to deeply questionable behavior. How long can such individuals remain in positions of leadership, especially when they are meant to serve as role models?

There are many perspectives and narratives about the situation between Iran, the United States, and Israel, and we cannot cover them all here. From our point of view, Iran was not a direct threat to the United States. Instead, it appears that U.S. actions may reflect Israel’s desire to dominate the region. The Epstein scandal may also connect to this broader picture. Some believe intelligence services created the entire Epstein network to gain leverage over Western leaders. That leverage could then be used to influence political decisions. Grand Corruption.

We support the idea of a transparent world and therefore support Transparency International’s efforts to expose corruption and highlight its harmful effects on society. You can read more about their work here.

Alongside the tragedy of war and loss of life, we also note that conflicts create huge financial costs that must be financed (usually through higher debt). At the same time, large amounts of military equipment are consumed and must be replaced, which increases demand for metals. These are not developments we wish for to strengthen an investment case, but they are, unfortunately, a part of reality.

Now to something more positive. The number of investors in our funds continues to grow, and we are now more than 120,000 investors on this shared journey. AuAg Silver Bullet has become the 20th most widely held actively managed fund on Avanza, excluding Avanza’s own funds. It is worth noting that many of these funds have existed for 26 years, while ours have been around for only six.

Growth across the Nordics is another encouraging sign. Interest in Norway has been so strong that the major newspaper Nettavisen traveled to Gothenburg to write a feature about AuAg.

This material is marketing communication. The information does not constitute investment advice or a personal recommendation. Investment decisions should be based on the fund’s information brochure and fact sheet, as well as your own considerations.

Investments involve risk. Past performance is not a guarantee of future returns. The money invested in the fund may both increase and decrease in value, and it is not certain that you will recover the entire amount invested.

Before making an investment decision, you should review the fund’s information brochure and fact sheet, available under Documents on the respective fund page at www.auagfunds.com.