Market & Portfolio Update
A Major Breakout in Precious Metals and Mining Shares
August 31st, 2026

Dear Clients,

We want to provide you with an important update regarding recent developments in the precious-metals markets and
the portfolio adjustments we implemented last week.

For some time, our research has indicated that gold, silver, and precious-metals mining companies were
approaching an important technical turning point. Based on that research, we increased our exposure to the
precious-metals sector while maintaining meaningful liquidity and continued participation in the broader stock
market.

Since making those changes, we have received additional confirmation supporting that decision.
Our research team closely follows the work of Michael Oliver and Momentum Structural Analysis (MSA), whose
methodology focuses on long-term and intermediate-term market momentum rather than simply reacting to daily
price movements.

What Has Changed?
Earlier in August, gold, silver, and mining shares were approaching critical momentum levels. Oliver was waiting for
confirmation that the months-long correction and consolidation had ended. That confirmation has now occurred.

In his August 30 report, Oliver states that intermediate-term momentum signals for gold, silver, GDX, and SIL
turned positive together in early August. More importantly, he believes the current advance is materially different
from the shorter-lived rallies experienced earlier this year and expects the new trend to continue.

This simultaneous confirmation across gold, silver, and mining shares is particularly important because strong
secular precious-metals advances tend to become more convincing when the metals and the companies producing
them begin moving together.

The Most Important Development: Mining Companies
Perhaps the most significant finding in Oliver's latest research involves gold and silver mining companies. He
describes the miners-versus-gold relationship as "the most important chart" in the August 30 report.

According to his analysis, mining shares are breaking upward relative to gold from a long-term base extending back
to approximately 2013. He believes this could represent the beginning of a period in which mining companies
significantly outperform gold itself.

Oliver characterizes the development as a major asset-class buy signal for the monetary-metals sector,
particularly mining companies. He believes capital may be beginning to rotate from traditional financial assets into
the much smaller precious-metals and mining sector.

Mining shares can provide greater upside participation during strong precious-metals cycles, but they also carry significantly greater volatility and company-specific risk than owning gold or silver directly.

Silver May Be Entering a Particularly Important Phase
We continue to be especially interested in silver. Oliver's research indicates that silver has already broken out
relative to gold on a longer-term basis. The recent correction did not invalidate that signal, and his August 30 report
expects silver to continue gaining relative strength versus gold.

Historically, silver can lag gold during the early stages of major precious-metals advances and then begin advancing
more rapidly during stronger phases of the cycle. This is one reason we believe maintaining exposure to both gold
and silver remains important.

Institutional Participation May Be Increasing
Another interesting development has occurred among some of the largest mining companies. Oliver specifically
highlights the recent advances in Newmont and Wheaton Precious Metals. He believes their behavior may indicate
that larger institutional investors are beginning to recognize the changing risk/reward environment and are allocating
capital toward major precious-metals companies.

While it is impossible to know precisely who is buying or why, the relative strength of these large mining companies
is consistent with the broader momentum improvement Oliver has identified throughout the precious-metals sector.

Commodities Are Also Strengthening
The development extends beyond gold and silver. Oliver believes the broader commodity complex remains
historically undervalued relative to financial assets. His research suggests that the recent commodity advance is not
simply the result of higher oil prices but may represent a broader rotation of capital toward tangible assets and
commodity-related companies.

We believe this broader trend is important in an environment characterized by high government debt, monetary
uncertainty, inflation risk, and changing global capital flows.

What We Did in the Portfolio
Based on the research available to us last week, we repositioned the portfolio to increase participation in precious
metals and mining companies while preserving significant liquidity.

Our original recommendation contemplated approximately 54% exposure to precious metals and miners. However, a proposed 2% position in Radisson Mining Resources could not be purchased because of trading restrictions associated with the security. Those funds therefore remained in the SWVXX money-market position. 

As a result, the portfolio currently maintains approximately 52% exposure to precious metals and mining investments and approximately 24% in money-market reserves. We view that additional liquidity positively. Rather than forcing another purchase simply to reach a predetermined percentage, we believe maintaining liquidity gives us greater flexibility if an attractive opportunity develops or if market conditions change.

Why We Are Still Maintaining Stock-Market Exposure 

While our conviction in precious metals has increased, we have not completely exited the broader equity markets. Approximately 20% of the portfolio remains allocated to broad-market equity investments.

Oliver has become increasingly cautious about the U.S. stock market. His August 30 analysis indicates that an intermediate correction of only approximately 6%-8% could begin breaking important longer-term momentum structures. He therefore believes that what might appear to investors as an ordinary market correction could potentially become much more significant.

However, those major breakdown signals have not yet been fully triggered. For that reason, we believe it remains appropriate to maintain some stock-market participation while watching these momentum levels carefully. If the evidence changes, we are prepared to adjust.

Why We Continue to Hold Significant Cash Reserves 

The approximately 24% allocation to SWVXX serves several purposes. It provides stability during periods of market volatility, gives us capital available to take advantage of future opportunities, and allows us to respond rapidly should conditions in equities, precious metals, or other asset classes change.

We do not view cash simply as an asset sitting on the sidelines. In the current environment, liquidity provides us with optionality.

If precious metals experience a normal correction during what we believe is a larger bull trend, the cash position may allow us to add exposure at more attractive levels. Conversely, if Oliver's anticipated deterioration in the stock market produces a definitive momentum breakdown, we can respond without being forced to raise capital under unfavorable circumstances.

Our Current View 

• The intermediate-term trend for gold has turned positive.
• Silver has confirmed an important momentum breakout.
• Silver appears positioned to continue strengthening relative to gold.
• Gold and silver mining companies have confirmed their own breakout.
• Mining shares may be entering a period of significantly stronger relative performance.
• Broader commodities are strengthening.
• The U.S. stock market remains intact but is approaching levels that warrant increasing caution.
• Maintaining substantial liquidity remains prudent.

Most importantly, we do not believe successful investment management requires predicting every short-term market move. Our objective is to identify major changes in market structure, protect capital when risk becomes excessive, and participate meaningfully when the potential reward justifies the risk.

The recent precious-metals breakout appears to represent one of those potentially important structural changes.

We therefore intend to maintain our current allocation while carefully monitoring gold, silver, mining shares, the U.S. equity markets, interest rates, the U.S. dollar, and broader commodity trends.

As always, markets can change quickly and no investment strategy can eliminate risk. Precious metals and especially mining companies can experience substantial volatility even during long-term bull markets. Our allocations will continue to be reviewed as new evidence becomes available.

Sincerely, 

Quest Commonwealth Investment Research Team

Research Team Research reference: Momentum Structural Analysis, 360° Weekend Report, August 30, 2026. This update summarizes research used as one input in our portfolio review process.

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