Why This Analyst Says Dump US Stocks and Load Up on Gold Miners Now

Gold just took a heavy hit. The yellow metal tumbled below $4,300 per ounce today, extending a big correction that has wiped out much of its 2026 gains. Silver followed and dropped another 5% on the session. For most retail investors, the headlines scream “sell.”

Kevin C. Smith, a financial analyst with a long history of studying commodity cycles, sees it differently. In a detailed thread, he argued that the recent correction in gold mining stocks is the buying opportunity. And he’s making a bold recommendation: sell S&P 500 index funds and buy gold miners.

Smith posted a chart from Crescat Capital showing what happened during the 1973 Yom Kippur War and the ensuing Arab oil embargo. The parallels to today, he argues, are hard to ignore.

When the war started in October 1973, oil prices spiked 287% by early 1974. The S&P 500 got crushed, falling 43.6% from peak to bottom over the next year. Gold mining stocks, meanwhile, soared. Over the same period, the XAU gold miners index rose 165.8% while the S&P 500 sank 31%. A year after the war began, gold stocks were still up 87% while the S&P 500 sat at its lows.

Smith’s point is simple: inflation shocks, especially from oil, can trigger sharp divergences between traditional equities and hard assets. In 1973, the fear of inflation drove money out of overvalued large‑cap US stocks and into gold and gold miners.

The Current Setup: Oil Spike Meets Overvalued Stocks

Smith points to recent events. Since February 28, when Israel and the United States began a series of missile strikes against Iran, front‑month West Texas Intermediate crude oil futures have risen 46.7%. That’s a rapid shock to energy prices, reminiscent of the 1970s.

And yet, he notes a CNBC headline from Thursday: “Gold and silver sell‑off accelerates as inflation fears grip global markets.” To Smith, that reads like an oxymoron. Normally, new inflation fears (especially from an oil shock) should be bullish for gold and miners. Instead, both are selling off.

His interpretation: the sell‑off is a shakeout, not a reversal. And with US large‑cap stocks still trading at elevated valuations, the stage is set for capital to rotate out of equities and into mining stocks, just as it did in the 1970s.

Smith’s view is not subtle. He believes the recent correction in gold mining stocks presents a timely buying opportunity. He recommends selling S&P 500 index funds and moving that capital into gold miners; a direct bet on the divergence he sees coming.

His thesis rests on two pillars. First, an oil‑driven inflation shock that pressures corporate earnings and valuations in the broad equity market. Second, the historical precedent that in such environments, gold miners have dramatically outperformed.

Read also: Gold Price Just Logged Its Worst Week Since 1982 – Could a 50% Rebound Be Happen?

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