David Erfle - Gold Market Commentary – Wed 8 Jan, 2020

Gold breaking higher, when will the stock finally catch up?

Dave Erfle kicks off today to share his thoughts on the balance between the performance of gold stocks vs the gold price. With gold breaking to 7 year highs, the stocks in a broad sense have still yet to breakout. We discuss what could drive the stocks higher and how Dave is managing his metals portfolio.

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Comments:
  1. On January 8, 2020 at 5:46 am,
    OOTB Jerry says:

    Gold back down, as most already see………….$1572, …at least from the price last night of $1611, ….Iran misses target, and just puts some holes in the sand…….might just call that pounding sand………… 🙂

  2. On January 8, 2020 at 5:49 am,
    OOTB Jerry says:

    I am going to mention the Ukraine Plane going down …….
    Only, in that this might be interesting if , anybody associated with the Ukrainian dealings and USrogue cia players had anything to do with the situation.

    • On January 8, 2020 at 5:52 am,
      OOTB Jerry says:

      Keep in mind, that the Ukraine has been the arms dealers net work for several years,
      where some of our top officials have been playing……
      Kerry, Biden, ….etc.
      I know , I know…..conspiracy theory…… 🙂

      • On January 8, 2020 at 6:04 am,
        Dick Tracy says:

        Iran maybe looking for a way out of this mess before the real shooting starts and it is too late. If there is one thing The US has learned from their endless wars it is how to strike back. Nobody wants to back down, humans are programmed idiots. DT

        • On January 8, 2020 at 6:07 am,
          OOTB Jerry says:

          Ditto……..

        • On January 8, 2020 at 6:20 am,
          Dick Tracy says:

          One of the Greatest movies of all time “The Day The Earth Stood Still’, made in 1951 shortly after The Second World War, has aliens visiting earth to tell the people on this planet that they don’t have the right to destroy our world. What a simple concept, however; our species can’t figure it out. DT

          • On January 8, 2020 at 6:25 am,
            OOTB Jerry says:

            Great show in black and white…………remember watching it late at night…..on the small screen…..

  3. On January 8, 2020 at 6:03 am,
    Charles says:

    I found this comment from Patrick over at Goldtent interesting:

    Patrick

    10. January 7, 2020 – 7:36 pm at 7:36 pm

    something else is happeneing.. markets are correcting strongly… odds on cme fomc tool are really starting to show rate cut probability increase.. market is pricing this in. I think the Iran stroy is a side show… and if it does exaggerate tonites move in gold… could end up an ugly upper shadow wick on the charts

    • On January 8, 2020 at 7:52 am,
      Matthew says:

      I agree that Iran is a sideshow. The big picture for gold looks so great because of the cumulative effects of an unsound monetary system run by a bunch of crooks.

      • On January 8, 2020 at 10:13 am,
        CaliJoe says:

        We had the same arguments back in 2011. Bottom line is, they can continue the charade as long as they want to. When I say “they” I mean Fed, Bullion Banks, investment banks etc etc. The last 3-4 days of action in metals are the proof that how obscene level these institutions can go to protect their “investments”

        • On January 8, 2020 at 10:26 am,
          Matthew says:

          BUT, this action did come after extreme overbought readings and gold rising for a rare 10 straight days so slightly scary declines should not be a surprise. Look at that overbought RSI:
          https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=0&mn=11&dy=0&id=p83148973283

          • On January 8, 2020 at 10:35 am,
            CaliJoe says:

            That’s fair enough. It needs to cool off the overbought readings a bit.

        • On January 8, 2020 at 10:32 am,
          Matthew says:

          I said yesterday that the bullish outcome is scarily uncertain and, in a different comment, that it was probably bullish that I find this week to be a little scary. So I guess that fear was not a contrary indicator after all.

    • On January 8, 2020 at 7:53 am,
      Matthew says:

      Kootenay Intercepts 650 gpt Silver Over 7.45 Meters Within 159 gpt Silver Over 39.9 Meters at Columba Silver Project, Mexico – Drill Highlights Include Overall Strike Length of F Vein Increased to 700 Meters
      http://pdf.reuters.com/htmlnews/htmlnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20200108:nCNWGDzSRa

  4. On January 8, 2020 at 7:50 am,
    Matthew says:

    So much for the pullback being done before Wednesday…
    https://stockcharts.com/h-sc/ui?s=SILJ&p=D&yr=1&mn=6&dy=0&id=p38318875839&a=569140876

  5. On January 8, 2020 at 8:29 am,
    Charles says:

    Back down she goes. I guess I was wrong about AXU. Should have stuck with Brixton as its closer to its bottom than AXU.

    • On January 8, 2020 at 11:11 pm,
      Excelsior says:

      Not necessarily. AXU is not at its bottom because it has been putting out repeated stellar exploration news (with 2 new discoveries at “Bermingham Deep” and “Inca”) and Alexco is making progress on the inclines at both Flame & Moth and the primary Bermingham deposits, and will be the lone primary Silver producer in Canada by the end of this year into a rising silver prices. It’s recent out-performance is warranted.

      https://stockcharts.com/freecharts/perf.php?AXU.TO,BBB.V&p=5&O=011000

      • On January 8, 2020 at 11:19 pm,
        Excelsior says:

        Personally I own both AXU and BBB for different risk expoures.

        AXU is a solid bet on leverage to rising Silver prices a Developer moving towards Production with a huge and continuing Exploration upside.

        BBB has both a Silver & Gold component. There is the in ground Hog Heaven ounces of Silver and some limited exploration scheduled there for 2020, but Brixton is really more followed at present for their Gold exploration campaigns at both Thorn & Atlin, so they they are more of a drill play at present and good results could send it rocking higher.

        • On January 8, 2020 at 11:28 pm,
          Excelsior says:

          I actually added a little bit to both positions today for the medium to longer term.

          • On January 9, 2020 at 12:02 am,
            Excelsior says:

            I have a small amount of dry powder to deploy if we see the PMs pull back for a few more weeks, and feel good about the longer term trend in the metals, so I’m actually looking for a cooling period to add to a few more positions before they really start to run later in the year.

  6. On January 8, 2020 at 8:35 am,
    Charles says:

    Matthew – What do you make of the chart on GLVMF (Golden Valley)? I took some partial profits yesterday, but seems like it could keep going up to around the next resistance zone around $0.56.

    • On January 8, 2020 at 10:21 am,
      Matthew says:

      I only have the Canadian listing and it looks very strong. But I think you were right to take profits regardless of what it does next.
      It is very overbought but probably doesn’t have much downside unless the sector as a whole runs into big problems. The breakout above the 2017 high looks great so any decent pullback will probably be met with plenty of buying. Rather than pull back much, it might just stall to recharge.
      https://stockcharts.com/h-sc/ui?s=GZZ.V&p=W&yr=3&mn=11&dy=0&id=p43737683007

      • On January 8, 2020 at 11:03 pm,
        Excelsior says:

        Golden Valley is underpinned by it’s 44.7% stake in Abitibi Royalities with a hefty NSR at Malartic; not to mentions its royalites on projects with Endeavour Silver, Kootenay Silver, Bonterra, Sirios, O3 Mining, VZZ and IZZ…. thus the strong stock chart. GZZ is actually still way undervalued on the arbitrage with RZZ even at these higher prices, so it still has further to rise to even be properly valued for just that part of its valuation.

        • On January 9, 2020 at 11:11 am,
          Excelsior says:

          Sorry, it was late and I was thinking of Sailfish Royalties NSR on Kootenay’s La Cigarra property and on Endeavour Silver’s El Compass mine.

          I own both GZZ and FISH and have been posting on both a lot recently, and just realized I attributed 2 of Sailfish Royalties NSRs to to Golden Valley. Thanks Wolfster for the head’s up.

          Here is the royalty that FISH has on KTN’s flagship:

          https://sailfishroyalty.com/index.php/projects/la-cigarra-royalty/

          • On January 9, 2020 at 12:20 pm,
            Excelsior says:

            Here is a slide from page 10 of the new January $GZZ #CorporatePresentation showing their asset mix and a minimum valuation should be $103.7 Million (for stake in RZZ and shares in SOI, VZZ, IZZ, but that doesn’t even include the Net Smelter #Royalties with (BTR) Bonterra, (SOI) Sirios, (OIII) O3 Mining, or (ELD) Eldorado gold, (IZZ) or (VZZ) which are attributed $0 value in that scenario. (currently Golden Valley is only valued at $68.5 Million based on today’s stock price, so they need to add $34.5 Million just to get to the very conservative minimum valuation). Instead of selling off it needs to increase about 34% + whatever value all the NSRs make.

            http://cdn.ceo.ca/1f1f2ga-Golden%20Valley%20Mines%20Assets%20Valuation.JPG

  7. On January 8, 2020 at 9:22 am,
    RICHARD/DOC says:

    The correction for gold is not over. There will be more down pressure but don’t let it now scare you out of your positions. A great buying opportunity is coming for some selective stocks. Iran gave Trump a way to “save face” and to back out of the corner he’s placed himself in. It also gave the ruling political class in Iran a chance to placate their backers that they responded—kind of like Trump’s do nothing missile barrage after the fake Duma chemical attack. Now if both sides are breathing a sigh of relief we might get some semblance of diplomacy going. The recent move up for gold was just a response to the iran tensions and now we can settle back into reality and let the PMs bottom and start their ultimate move higher based on good fundamentals of exorbitant money printing.

    • On January 8, 2020 at 9:57 am,
      Charles says:

      Thanks Doc. That is a great point. I am not really selling anything accept for some bad buys on the way down the last several years and re-positioning into some other names that I have learned about from you and others. My portfolio really just keeps getting better and think I am pretty well positioned for when things take off. I am looking forward to the ride with you and others.

      • On January 8, 2020 at 10:04 am,
        RICHARD/DOC says:

        Charles, as I mentioned recently, I took my gains from CDE at the top. It’s now getting hammered and I’m positioning myself to get back into it at lower prices again. By the way, I’ll purchase some more BBB soon. AXU is a add on soon.

        • On January 8, 2020 at 10:23 am,
          CaliJoe says:

          Doc,
          I sold 1/2 of AUY in yesterday AH at $4.12, I have feeling it will see low 3’s again. BTW, I think this was the first smart move by Mullahs and Trump administration, both played well. Reminds me of action when Saudi Aramco was hit – oil shot up for one day then it went sideways for 3 months. I guess, we can see the same action for gold?

          • On January 8, 2020 at 10:43 am,
            RICHARD/DOC says:

            Cali, I don’t see 3 for AUY but we certainly could see between 3.25 and 3.50. I wouldn’t be surprised to see a breather for the PMs for a few weeks here. It would be a good thing and a huge chance to pick up some laggards and add to some of the better plays at lower prices.

        • On January 8, 2020 at 10:24 am,
          Charles says:

          Thanks. I took some profits too on CDE the day after you mentioned. What is you target add price for that one?

          • On January 8, 2020 at 10:50 am,
            RICHARD/DOC says:

            I’ve bought a “tad” already and we might have one more good day of carnage and then I’ll get a little more aggessive. I hope it gets down to about 5.80. I believe the rest of this week and next week will be challenging for the PMs and then I think it quiets down. Don’t catch a falling knife with CDE. If we get another nice down day tomorrow, I’ll add a little and then over time add more. I’ll try to remember to let you know when I add more for transparency sake.

          • On January 8, 2020 at 10:53 am,
            Charles says:

            Thanks Doc.

          • On January 8, 2020 at 10:54 am,
            RICHARD/DOC says:

            Charles, the other possibility for CDE is that tomorrow we get a reflexive rebound and then Friday and the rest of next week we move lower to its’ low.

    • On January 8, 2020 at 10:02 am,
      OOTB Jerry says:

      Back into Reality…………….lol
      Good one Doc……..

  8. On January 8, 2020 at 9:52 am,
    CFS says:

    PUMPING AWAY…..pumping away……pant…..pumping away…
    https://wallstreetonparade.com/2020/01/feds-balance-sheet-explodes-by-413-billion-in-119-days/
    …..pumping away…..got to keep the stock market inflated …….pumping away….

  9. On January 8, 2020 at 9:57 am,
    cfs says:

    Gold Price is manipulated…..
    but:
    https://www.voimagold.com/insight/the-essence-of-gold-supply-and-demand-dynamics

    Precious metal stocks are not manipulated as a group, although individual ones are at various times.

  10. On January 8, 2020 at 10:42 am,
    Matthew says:

    GDXJ has already retraced half of the move off of the last short term low and volume has been bullishly unimpressive.
    Testing a speed line support right now:
    https://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=0&mn=11&dy=0&id=p02358084053&a=711910978

  11. On January 8, 2020 at 11:05 am,
    b says:

    The red is unreal today, great time to buy. lol
    Well, if this isnt good enuff we have the doldrums to look forward to.

    I listened to some G Carlin last night, nutins changed, we still have owners and they do as they please.
    The only question is how much do they own, do they own China,Russia too or just the west.

    In any case, great time to buy.

  12. On January 8, 2020 at 11:18 am,
    cfs says:

    News commentator on Boeing crash at Tehran.

    He was right about uninformed people, and I INCLUDE HIM.

    Preliminary reports out of Iran talk bout engine fire.
    Twitters out of Tehran show fire from engine area.
    (For Mr. Moriarty: I AM NOT an plane expert)
    However, heat-seeking missiles often hit engine areas.
    Also true , pilots are trained to cut off fuel to engine fires
    That plane can fly with only one engine.

    The most logical explanation was that it was mistakenly shot down.

    Efforts from Iran to impede production of the Black Box would tend to confirm this.

    • On January 8, 2020 at 11:21 am,
      OOTB Jerry says:

      Logic does not work in our world…………nothing going on is logical………JMO

    • On January 8, 2020 at 12:20 pm,
      Robert Moriarty says:

      CFS:

      It easily could have been an accidental shutdown and heat seeking missiles always hit engine areas and I am an airplane expert.

      • On January 8, 2020 at 12:29 pm,
        bonzo barzini says:

        I hope everyone here will have better sense than to fly to Iran or Arabia for a good while.

      • On January 8, 2020 at 12:52 pm,
        cfs says:

        It could have been many things, but the plane was 2 years old. Kiev says the pilots were very experience, maintenance was good, and no problems had shown up in recent routine maintenance. The plane had flown from Kiev earlier- 3 hour flight

        Given flames observed from the engine area….is that explained by an engine shut-down?
        i.e. shutting off the wrong engine could cause a crash, but still leaves an explanation needed for fire.

      • On January 8, 2020 at 12:56 pm,
        Robert Moriarty says:

        CFS:

        Damn autofill. I meant shoot down

        Almost certainly it was shot down. If you shutdown an engine it does not go on fire. Someone pulled a trigger and shot down the plane by accident. It comes under the stuff happens rule which doesn’t help those who lost loved ones.

  13. On January 8, 2020 at 11:19 am,
    cfs says:
  14. On January 8, 2020 at 11:27 am,
    OOTB Jerry says:

    Now here is some logic……..
    WASHINGTON (AP) — Senate Majority Leader Mitch McConnell said Wednesday that he will launch President Donald Trump’s impeachment trial on his terms, without any agreement on whether to call witnesses, when House Speaker Nancy Pelosi sends the abuse and obstruction articles to the Senate.

    “There will be no haggling with the House over Senate procedure,” said McConnell, R-Ky. “We will not cede our authority to try this impeachment. The House Democrats’ turn is over.”

    The trial on abuse of power and obstruction of Congress charges passed by the House last month could begin as soon as this week if Pelosi, D-Calif., sends the articles of impeachment to the Senate.

    • On January 8, 2020 at 2:39 pm,
      Fritz Bender says:

      That is the way it should be…go wherever the “evidence” takes you.

      • On January 8, 2020 at 4:19 pm,
        David says:

        Evidence comes from witnesses and documents. Comments of Legislators are hearsay and not evidence. If McConnell blocks witnesses and documents like the White House did, then McConnell is also Obstructing Justice and the “so called” Trial never happens. We should not tolerate corruption from our elected leaders…like we have been doing.

  15. On January 8, 2020 at 12:32 pm,
    cfs says:

    https://youtu.be/HzgbBreXXjw

    It takes 4 republicans to vote with Democrats to cause a surprise, which Pelosi thinks he has 3 votes for so far.Aaska, Maine, Virginia, and she’s working on 7 others.

  16. On January 8, 2020 at 3:28 pm,
    Fritz Bender says:

    Has anyone reviewed latest Wallbridge drill results? My question is does it keep grade at same levels and does it look like same AISC? Of course I know it adds to resource.s

  17. On January 8, 2020 at 11:23 pm,
    Excelsior says:

    How Chinese Financing is Fueling Megaprojects Around the World

    Visual Capitalist – January 7, 2020 – Nick Routley

    https://www.visualcapitalist.com/global-chinese-financing-is-fueling-megaprojects/

  18. On January 8, 2020 at 11:25 pm,
    Excelsior says:

    (KNT) K92 on a roll as it tops FY19 production guidance

    Papua New Guinea-focused K92 Mining has rounded out 2019 with better-than-expected production from its Kainantu gold mine.

    07 January 2020

    “Record December-quarter output helped it reclaim lost production time in the underground operation while the company worked to double capacity to 400,000tpa.”

    “The Vancouver, Canada-based company said gold-equivalent output for 2019 exceeded the increased 72,000-80,000oz guidance (from 68,000-75,000oz guided previously) by 2,256oz, or 2.8%, to reach 82,256oz Au-equivalent.”

    https://www.mining-journal.com/gold-and-silver-news/news/1378564/k92-on-roll-as-it-tops-fy19-production-guidance

  19. On January 9, 2020 at 12:17 am,
    Ozibatla says:

    The hard correction previously mentioned as a possibility in gold has indeed ensued so far. Not surprising in my eyes. The move up in gold was really a reactionary move. Would be good to see if $1525-$1530 holds.

    • On January 9, 2020 at 7:34 am,
      Excelsior says:

      Yep, not a surprise as Gold was surging for over a week and it was overbought along with the miners. This is the “pause that refreshes.”

  20. On January 9, 2020 at 8:53 am,
    Marty says:

    added to my SILV @ US 6.25
    AXU @ 1.96