ETF UPDATE: Gold, Silver Skyrocket - US Debt and Tariffs Enter Unchartered Waters

Another government shutdown is on the way. The potential for 100% tariffs on Canada. Plus, the president wants to give away $2,000 checks, and he wants 1% interest rates. What could possibly go wrong? Now you understand why the precious metals and commodities markets are skyrocketing. Let's take a look at it all. I'm Ronda Leg with ETF Guide. Great to have you with us.

We'll start with tariffs. Everyone's talking about tariffs. I asked you on our playlist, actually our community section, I did a poll asking you, do you think that US tariff revenues are big enough to cover the US government's $1.88 trillion budget deficit? Almost 80% of you had the right answer. You said absolutely not. The rest of you, well, we need to get you re-educated on the math of budget deficits. We'll do that in today's episode, budget deficit 101. It's pretty easy to understand. Actually, it's fourth grade math. Even though the numbers are very big, we'll explain that to you.

Let's examine the big picture view, high level of major asset classes so far in 2026. Pretty much all are up. We've got some modest losses there in the bond market. Actually flat performance in the US bond market, BND. The runaway winner has been commodities, which get all the attention. Of course, precious metals, gold, silver, copper are all part of that group. SDCI ahead by almost 9% since the beginning of the year. We've talked about this particular ETF extensively on ETF Guide TV, one of the best core commodities ETFs out there, has garnered significant ratings from companies like Morningstar, showing that it's got the robust selection method for how it puts together its portfolio of commodities, its index.

So SDCI, if you're missing any exposure to commodities, or you're looking just for a core exposure to this area, which a lot of investors have been looking towards for inflation hedge and just protection against a weak dollar, certainly SDCI, I think, merits your attention. So put it on your radar. Also, some of these other areas, look at Bitcoin IBIT, which had some nice gains and gave up much of its gains. What's going on with Bitcoin? Maybe an opportunity for you long-term investors to be picking up some crypto on weakness. I don't understand the weakness. I'm not going to get into all the details about it, but let's just say that I think it's probably temporary, and I think there's certainly some big upside in Bitcoin and cryptos in general.

As far as S&P 500 is concerned, if we take a look at the 11 industry groups or sectors that make it up, we've got eight up since the start of the year. Three are down, and there's a theme going on here. If you look at the top two performers, materials and energy, both highly linked to commodities. So that's been the trade that's working. Industrials to some extent are involved in that. And then look at consumer staples. This is one of those defensive sectors. This is kind of interesting to see this particular sector as a top performer in 2026 could be the sign of a more defensive positioning for investors. Some of those more offensively oriented sectors like technology and consumer or communication services, which have been great performers over the past several years, are taking a little bit of a breather.

Our original series, Metals in Motion, we're going into season 3 here in 2026 with SPAT Asset Management, and we got you covered, not just precious metals, but also those critical materials, critical minerals, things like uranium, as well as copper and lithium and nickel and zinc and all that. And so, tune in. We've got our debut episode coming up this week and we got you covered. Here's one of Sprat's ETFs, SLVR. And this is an interesting one. I wanted to chart this one for you because everyone's been talking about silver. Yes, physical metals have been a great trade, but what if we combined silver miners along with physical silver and rolled it up into one ETF? Well, that's SLVR.

And this one-year chart helps you visualize and understand the magnitude of outperformance over physical silver alone. You get that and have had that by simply combining physical silver with silver miners. And as you can see here, it's been almost a 50% performance advantage for SLVR over physical silver alone over the past year. Now, I don't know if that'll continue looking ahead, but again, if you're looking to play silver, I think SLVR is definitely a smart way to do that versus just the silver physical silver alone trade. In terms of gold, let's talk about this one.

So far this year, GLD is ahead by almost 16%. And if we look at gold, physical gold versus leveraged gold miners, we've got Nugget, NUGT, and Jnug from Direction. This is a more compressed chart. This is just 2026 performance. And as you can see here, it's been lights out for the 2x bullish gold miner ETFs. Both of them up over more than 50%. We're not even out of January yet. And these ETFs clearly have huge upside potential if that trade, that precious metals continues to outperform to the upside, which it seems like it's going to.

You know, those of you asking me, well, when does this stop? What's the ceiling on precious metals? Well, I think here's the better question. What's the ceiling on runaway deficit government spending? What's the ceiling on the inability of US lawmakers to agree on anything meaningful? What's the ceiling on the president's daily antics and tariff threats? You tell me what the ceiling on all that is and I can tell you what the ceiling on precious metals and Bitcoin is. Dr. Copper looks pretty healthy. Here's a chart of COP, and then you got COP J, which is the small cap version. And then you've got CPXR, which is physical copper 2X bull.

All of these trades are doing quite well. I think copper is kind of a sleeper. People are just beginning to wake up to the fact that we have a copper shortage, a massive global shortage of copper and we're going to need more copper and we've got all of the potential of tariffs. We've also got shortages and demand from AI data centers as well as electrification and all kinds of other things. So copper, I think the runway looks pretty good for copper looking ahead.

Now, we talked a little bit about budget deficits. Let's do some 101 on how this works. So if you earn $10 and you spend 20, you have a deficit of 10, right? So it's fourth grade math. Well, the government does this. They've been running massive multi-trillion dollar budget deficits for decades. And in 2025, they took in $5.3 trillion of revenue. Wow, that's a lot of bananas. The problem is they spent over $7 trillion and that left them with a deficit of $1.78 trillion.

Plus you got that runaway deficit spending. You add national debt which is approaching $40 trillion, higher interest rates on all this debt. And now you begin to understand why finite assets like precious metals, Bitcoin, there's demand for these types of assets. These investors, they want protection from the government. And by the way, you know, stop calling US treasuries risk-free assets. They're not free from credit risk and they're not free from interest rate risk. So let's stop doing that. I know all the textbooks for many, many decades have taught us to believe that US treasuries are risk-free. Well, they're not.

The architecturally sound investment portfolio starts with three containers. Your safety bucket, your core, and then your non-core. And the whole idea here folks is to build a portfolio that can operate and perform and do well in any kind of climate. So that includes up markets, down markets, flat markets. And now more than ever, it's important for you to have a safety bucket to protect yourself from all the craziness that surrounds us. And this is what we teach.

This is what I teach in our online courses. We have a course all for you built on safety so that you have the proper protocols for protecting yourself and growing your money and so you can enroll in that free course. It's available in the description section below. We also have two other courses. One built for folks that are approaching retirement or planning for retirement. Enroll in that course and then habits of the investing great separates the great from everyone else. That particular course covers that. So again, I encourage all of you to enroll in those courses.

And you know, again, the craziness that surrounds us with 100% tariffs on Canada and all these threats. I mean, that's if they do a deal with China. Wall Street's neatly designed forecasting models have officially been obliterated. All right? So, you can throw all those into the trash and garbage. And now we get to the place where all of us are at is now we need to look at our own buckets, our own containers. How do we protect ourselves? How do we grow our capital? And so now more than ever, it's important to position yourself and be ready.

And 100% tariffs. I mean, how bonkers is that? I mean, why stop there? Let's do 500% tariffs. And while we're at it, let's do a,000% tariffs. It's gotten so bad that my wife now wants to do tariffs on me. She wants to impose a husband tariff. That's how bonkers it's gotten. And I'm negotiating with her. I'm trying to get her down to 50%. So, wish me the best.

Let's take a look at the Bloomberg Billionaires Index to conclude today's episode. The big money. How did they get so wealthy? How did they build their fortunes? Well, this isn't going to change. Society is becoming more digitalized than ever. And technology, technology, technology. Yes, that big money made its fortune in technology and that's not going to change and this helps us to understand as investors how we should be.