Erik Wetterling – The Alpha-Driven Explorers Have Been More Resilient Than Producers and Developers In This Precious Metals Correction
The KE Report w/ Shad Marquitz (10-21-2025)
Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins me for a candid discussion to review how different stages of the precious metals stocks are responding to the outsized corrections today and at the end of last week in gold and silver prices.
🔑 Key Insights from Erik Wetterling:
🔹 We start off noting the deeper pullbacks are occurring in the producers, due to their tighter correlation with PM prices.
These stocks had attracted a lot of attention from momentum investors, that often were piling in without much thought as to the specific fundamentals or longer-term investing case for these companies.
🗣 Quote: “If you’ve been in producers over the last six months, you probably had the best performing type of portfolio in this sector. They have gone up absolutely the most because they get the direct benefit of higher metal prices, right? I mean, if prices are higher today than they were yesterday, they’re getting more for their product. So, they’re directly making more money compared to yesterday. Of course, then we have a day like today, a few months later. So, nobody knows what the long-term metal price is going to be anyway. But the point is that yes, the ones that are getting sold off the hardest are typically the ones that have ran the hardest.”
🔹 In contrast, the alpha-driven gold or silver explorers are much more driven by newsflow; so the underlying metals prices are less germane.
As a result, the explorers have been more resilient to this sector correction; and were some of the only stocks in the green on a turbulent day in a sea of red.
👉 Erik points out that the explorers also didn’t have as much upside torque as the metals prices were climbing, because they are driven by their own micro catalysts and fundamentals.
🔹 Erik is becoming more animated by the second wave of the Lassonde Curve, where the developers have the leverage and optionality to rising metals prices.
There remains a large delta in where the ounces in the ground are being valued versus the margins that the producers are making for each ounce of gold or silver they pull out of the ground and process.
“I still think that the second wave of the Lassonde Curve, especially in the gold sector, is probably the best risk vs reward. I mean it’s very unusual because as we just said the margins on ounces coming out of the ground is higher than the what the gold price was for all of human history up until like 2023. And it’s like who is used to this? Nobody’s used to this. We’ve never seen this before. I mean the margins blow away the 2011 top and they blow away the 2020 top, but at the same time what have we been seeing out there in terms of performance of the developers or the value of ounces in the ground?”
➡️Click to listen to the full interview to hear why explorers have held up better in this PM correction, and why Erik is animated by the developers in the 2nd wave of the Lassonde Curve.
Click here to follow Erik’s analysis over at The Hedgeless Horseman website
Investment disclaimer:
This content is for informational and educational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security. Investing in equities and commodities involves risk, including the possible loss of principal. Do your own research and consult a licensed financial advisor before making any investment decisions. Guests and hosts may own shares in companies mentioned.
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