(Kitco News) - Investors navigating the precious metals market are facing a massive disconnect between government rhetoric and institutional action, with the U.S. Treasury attempting to talk down prices while major banks position for record highs, according to John Feneck, founder of Feneck Consulting.
In an interview with Kitco News, Feneck highlighted the glaring contradiction between Treasury Secretary Scott Bessent’s recent dismissal of the gold rally as a "speculative blow-off" and the bullish forecasts emerging from Wall Street.
"Anytime Bessent or Powell or anyone in the US government is talking, you have to listen," Feneck said. "However... why do you think these guys are talking the trade down, if you have the US banks on the other side of the trade? They've all raised their targets over the last few months."
Feneck pointed to aggressive near-term targets from some of the world's largest financial institutions as evidence that the "smart money" is betting against the official narrative.
"JP Morgan at $6,000 an ounce, Goldman at $5,400 an ounce, B of A at $6,000 an ounce – in the next couple of months, not year end," Feneck noted, emphasizing the short timeframe of these bullish calls.
The 'Commodity War' and Tungsten’s 100% Surge
Beyond gold and silver, Feneck argued that the market is entering a broader "commodity war," driven by geopolitical tensions and supply chain weaponization. He pointed to the tungsten market as a prime example of this volatility, noting that prices for the critical defense metal have doubled in just 90 days following new export restrictions from China.
"China's been very forthright in saying, 'we're not exporting any tungsten, starting January 1st, 2026,'" Feneck said.
Feneck’s warning aligns with recent geopolitical developments. On Feb. 4, 2026, China formally announced strict export controls on tungsten and other critical minerals, citing national security interests, which solidified restrictions that had effectively halted shipments earlier in the year.
According to Feneck, the average spot price of tungsten surged from approximately $673 in early November 2025 to $1,375 by February 6, 2026—a gain of more than 100% in three months. He attributed the squeeze to the metal's critical role in the defense sector, specifically for "armor-piercing bullets, armor, missiles, [and] tanks."
To capitalize on this supply shock, Feneck disclosed that he is buying US-based tungsten plays, specifically naming Guardian Metal (GMTLF), American Tungsten (TUNGF), and Spartan (SPRMF) as top picks.
'Buy the Flush': Navigating Silver Volatility
Addressing the brutal sell-off on Jan. 30, which saw silver prices plummet nearly 30% intraday, Feneck characterized the move as a liquidity flush exacerbated by algorithmic trading rather than a fundamental breakdown.
"We saw some bad trading on Monday, and then things just kind of leveled off," he said. "The shorts got out of the way around $50, $60 silver and just let it go... and then they just attacked it on month end."
Feneck advised investors to view these violent corrections as buying opportunities rather than reasons to panic, though he cautioned against leverage.
"This is not a casino. Don't treat it like a casino," he warned. "You have to be able to afford to lose 20% to 30% on an equity correction."
Investment Strategy: Majors vs. Juniors
Despite the risks, Feneck remains aggressively positioned, revealing a portfolio allocation of 50% in junior miners, which he believes offer superior leverage in the current bull market.
"You're in a bull market right now. You have to buy these dips," Feneck said, noting that his firm was a net buyer during the recent correction.
For exposure to the sector, Feneck mentioned holding major producers through ETFs like GDX and GDXJ, while taking specific "rifle shots" in the junior space. In addition to his tungsten picks, he highlighted Paramount Gold Nevada (PZG), which received federal approval for its Grassy Mountain Gold Project in Oregon on Jan. 29, 2026, marking a historic permitting milestone.
He also pointed to Power Nickel (PNPN) as a preferred copper play due to its strong drilling results and backing from billionaire investors.
"The little guys are gonna get taken out if we're truly in a rally," Feneck concluded.