I just saw that gold has dropped again today, falling below $4,300, and silver has also declined by 5%. Most people are shouting to sell when they see these news, but an analyst who has studied commodity cycles for many years, Kevin Smith, is going against the trend.

His perspective is very interesting: now is the opportunity to buy gold mining stocks, and he even recommends directly selling S&P 500 funds to switch into gold mining stocks. It sounds bold, but he supports it with historical data.

During the Yom Kippur War in 1973, Arab oil embargo caused oil prices to surge by 287%. At that time, the S&P 500 dropped 43.6% from its high, but the gold mining index (XAU) rose by 165.8%. In other words, when traditional stocks were suffering, gold-related assets were celebrating. One year after the war started, gold stocks still rose by 87%, while the S&P 500 had already hit bottom.

The current situation is somewhat similar. Since the Israel and U.S. airstrikes on Iran at the end of February, oil prices have increased by 46.7%. Rising energy prices usually lead to inflation expectations, which should be favorable for gold. But ironically, the market is instead selling off gold and silver.

Smith believes this is not a reversal signal but a shakeout. His logic is: large-cap U.S. stocks are still highly valued, and once inflation really bites, funds will rotate from stocks into hard assets. Just like in the 1970s, gold mining stocks will significantly outperform.

His advice is straightforward—sell S&P 500 funds and buy gold mining stocks. The reason is that oil-driven inflation will suppress traditional corporate profits, and historical experience shows that in such environments, gold assets will greatly outperform other asset classes. To him, this gold correction is an opportunity to get in.