David Erfle - Gold Market Commentary – Tue 28 Jan, 2020

A Focus On The Moves In Gold Stocks and Silver

Dave Erfle joins me today to focus on the precious metals sector. We use the action this month in gold stocks and silver as a barometer for short term future moves. Dave shares his general strategy when it comes to managing his metals stock portfolio as well as a couple comments on upcoming drill programs.

Click here to visit Dave’s website and find out more about his newsletter.

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Comments:
  1. On January 28, 2020 at 11:24 am,
    OOTB Jerry says:

    https://www.zerohedge.com/markets/its-time-sell-charles-nenner-warns-market-will-go-down-40
    “It’s Time To Sell” – Charles Nenner Warns “Market Will Go Down 40%”
    Renowned geopolitical and financial cycle expert Charles Nenner says his “stock market cycle has topped.”

  2. On January 28, 2020 at 11:26 am,
    OOTB Jerry says:

    “If we see a good close on the S&P futures for March below 3230, that’s only a couple of points away from here. Then we get lower price targets, and then this could turn into something much more serious…

    These bull markets don’t stop on a dime. So, we can go up and down and up and down…

    People always think there is a buying opportunity… but this market will go down in a strong, strong way.”

    • On January 28, 2020 at 11:28 am,
      OOTB Jerry says:

      On gold, Nenner still stands by his prediction that “gold will go to $2,500 per ounce” in the next few years. Nenner explains,

      “Cycles show me that gold and silver will be going up for a couple of years…. I take profits in a short term top, but people say that Mr. Nenner says the long term top is $2,500. So, I am in for the long term. The problem is it can go to $1,890 and then suddenly to $1,470, and they get afraid and sell out and no more long term investment… If you are strong enough, let it go to $2,500, but never get weak even if it goes down. Be a long term investor….$2,500 gold could take three years.”

      • On January 28, 2020 at 12:05 pm,
        bonzo barzini says:

        I doubt it will take 3 years to reach $2500 gold, but I can wait if it does, unless the coronavirus gets us. If Bernie wins next November gold might go to 2500 in 1 year.

        • On January 28, 2020 at 12:35 pm,
          Matthew says:

          The miners will do so well relative to gold that it won’t matter if gold moves a bit slowly. This bull market will be far better for the gold miners than the one that ended in 2011.
          I see 3750 gold in 5 years or less.

          • On January 28, 2020 at 3:29 pm,
            OOTB Jerry says:

            How about this number………..
            How much higher could gold go in the longer term? Nenner says,

            “I made the calculation that if the system breaks down and we have to go back to the gold standard, then gold would be around $60,000 per ounce. Who knows what’s going to happen.”

          • On January 28, 2020 at 4:11 pm,
            Canuckski says:

            I luv it when you lay out specifics like 3700+ within 5 years Matthew. I am very aware of your ongoing and open call that we’re living in PM (Gold/Silver) bull market. So, the detail offers meat on the bones for me to chew on. Thanks.

          • On January 28, 2020 at 4:56 pm,
            OOTB Jerry says:

            Ditto……….

          • On January 28, 2020 at 5:36 pm,
            Bill says:

            I agree we are in a long term bull market. Yesterday told the tail for short term with lots of negative news and poor follow through with gold especially the minors meant a short term POOF and so it is. I love BMoriarty chicken little call AGAIN…we will not have a major crash in the general but a well needed correction and maybe a steep one. There’s no where for the rest of the haywire world to put their cash. The US is still it and I mentioned this 4 years ago.

          • On January 28, 2020 at 5:48 pm,
            OOTB Jerry says:

            http://www.marketoracle.co.uk/Article53696.html
            Gold price 2016…….$1100………..

          • On January 28, 2020 at 8:57 pm,
            Matthew says:

            Guys, Nenner is probably basing his $60,000/oz on the gold price relative to U.S. debt, which has grown massively since gold hit 850+ in 1980. But even if we are very conservative and use M1 money supply rather than debt for our comparison, gold would have to hit roughly $9,000 today in order to match its January 1980 high. M1 that month in 1980 was $385.8 billion. Today, M1 is $3,978.1 billion (almost $4 trillion).

          • On January 29, 2020 at 7:39 am,
            OOTB Jerry says:

            I think Nenner……..says, if, we were to go back to a “gold Standard”…
            therefore, I think your conclusion/assumption of the $60k, is correct…might even be higher considering the amount of missing money….

          • On January 29, 2020 at 8:57 am,
            Excelsior says:

            It is incredibly unlikely that the banksters will ever let things return to a gold standard, so that seems implausible. They want the control to print at will with their fiat money machine.

  3. On January 28, 2020 at 11:27 am,
    cfs says:

    It’s a Tuesday gold and silver options closing day….typical manipulation time.
    Don’t you guys have a memory that lasts a month ?

    • On January 28, 2020 at 2:01 pm,
      4 oz says:

      Shhhhh~~ Don’t shine any light on my phyzz Silver adding system!

    • On January 28, 2020 at 5:45 pm,
      Raymondo Colella says:

      Gold gets hit every Chinese New Year’s

  4. On January 28, 2020 at 11:36 am,
    cfs says:

    Metals Investor Forum on Jan 17-18, 2020.

    https://www.youtube.com/channel/UCZrZnuYMhX0aDCIOlqe4myA

    • On January 28, 2020 at 3:58 pm,
      Excelsior says:

      They do a pretty good job at those MIF conferences with documenting the primary presentations, and several good follow-up interviews from the newsletter writers.

      > Eric Coffin talks to Ian Bliss, CEO of Northern Shield Resources

      Jan 17-18, 2020 Metals Investor Forum #VIDEO

      “Ian Bliss, President & CEO of Northern Shield Resources (NRN) (NSHRF) and Eric Coffin of HRA Advisories discuss the company’s drill program at their two flagship properties, the Shot Rock Property in Nova Scotia and the Root & Cellar Property in Newfoundland”

      https://www.youtube.com/watch?v=ylC-QsN1C-0

      • On January 28, 2020 at 3:59 pm,
        Excelsior says:

        (NRN) (NSHRF) Northern Shield Closes $300,000 Private Placement with Mr. Rob McEwen

        by @newswire on 28 Jan 2020

        https://ceo.ca/@newswire/northern-shield-closes-300000-private-placement-with

        • On January 28, 2020 at 4:17 pm,
          Excelsior says:

          Good thoughts from Eric Coffin regarding the Rob McEwen placement in Northern Shield:

          _____________________________________________

          @HRA-Coffin – “My understanding is the Ian met with Rob right after closing the last PP. He didn’t desperately “need” the money and, frankly, I don’t think he expected McEwen to say yes because it was early stage. I think Ian just pulled a more or less random number out of the air when McEwen asked how much he was looking for. The part that surprised me was that it was basically “at market”. McEwen tends to drive a pretty hard bargain. I can only assume he likes the look of the targets enough to just go along with the pricing. $NRN”

          https://ceo.ca/nrn?5b1b0de18c8a

          • On January 28, 2020 at 4:18 pm,
            Excelsior says:

            @HRA-Coffin – “Ian is a pretty hard bargainer too. Scot vs Scot. The most important point to this news is that it should bring a lot of new eyes to the story, particularly out of Toronto. McEwen has a pretty big fan club. I’d imagine a lot of brokers who’ve never heard of $NRN will be paging through the slide deck today.”

            https://ceo.ca/nrn?1a1e70d6d915

          • On January 28, 2020 at 4:29 pm,
            Excelsior says:

            Here is a nice slide of LSE (Low Sulphidation Epithermal) Gold, and why Northern Shield is in the right kind of deposit to find a very large deposit.

            https://s3-us-west-2.amazonaws.com/cdn.ceo.ca/1f30ign-Screenshot_20200128-094930_Drive.png

  5. On January 28, 2020 at 1:55 pm,
    Thomas says:
    • On January 28, 2020 at 4:31 pm,
      Excelsior says:

      It was a deal liked by the market and both sides of the transaction, with a number of synergies on where they had properties and consolidating resources into a larger mid-tier on track to be a major producer in 2 more years.

      A true success story in the mining space with Ross Beaty at the helm. Very well done.

  6. On January 28, 2020 at 5:17 pm,
    Excelsior says:

    Overall it was a pretty tough day in the Silver miners as Silver also took a substantive hit today.

    Here is a daily performance Chart of the Silver Producers. It was encouraging to see a few companies (Maya Gold & Silver, Sierra Metals, and Santacruz Silver) bucking the overall trend downwards today, because they had each put out positive news recently that kept buyers coming in a rough overall environment.

    > Symbol – Silver Producers – Daily Change %

    MYA.TO Maya Gold and Silver Inc. +7.30%
    SMT.TO Sierra Metals Inc. +7.18%
    SCZ.V Santacruz Silver Mining Ltd. +3.85%
    _____________________________________________
    ASM Avino Silver & Gold Mines Ltd. -1.31%
    HOC.L Hochschild Mining plc -1.90%
    FSM Fortuna Silver Mines Inc. -2.00%
    EXN.TO Excellon Resources Inc. -2.20%
    AG First Majestic Silver Corp. -2.27%
    EXK Endeavour Silver Corp. -2.87%
    PAAS Pan American Silver Corp. -2.93%
    USAS Americas Gold and Silver Corporation -3.10%
    SVM Silvercorp Metals Inc. -3.14%
    GGD.TO GoGold Resources Inc. -3.70%
    SBR.TO Silver Bear Resources Plc -3.85%
    FRES.L Fresnillo Plc -3.95%
    GPL Great Panther Mining Limited -4.13%
    SSRM SSR Mining Inc. -4.26%
    CDE Coeur Mining, Inc. -6.83%
    IPT.V IMPACT Silver Corp. -9.41%
    HL Hecla Mining Company -9.43%

    • On January 28, 2020 at 5:18 pm,
      Excelsior says:

      $SMT $SMTS Sierra Metals Reports Strong 2019 #Production Results and Announces 2020 Guidance
      January 23, 2020

      > 2019 Consolidated Production Highlights

      #Silver production of 3.4 million ounces; a 24% increase from 2018
      #Copper production of 39.9 million pounds; a 17% increase from 2018
      #Zinc production of 81.1 million pounds; a 6% increase from 2018
      #Lead production of 35.5 million pounds; a 28% increase from 2018
      #Gold production of 11,632 ounces; a 50% increase from 2018

      https://www.sierrametals.com/investors/news-releases/news-release-details/2020/Sierra-Metals-Reports-Strong-2019-Production-Results-and-Announces-2020-Guidance/default.aspx

      • On January 28, 2020 at 5:19 pm,
        Excelsior says:

        (SCZ) (SZSMF) Santacruz Silver Reports 2019 Annual Production of 2,829,459 Silver Equivalent Ounces
        28 Jan 2020

        > Total production reached 2.8 million equivalent ounces of silver, representing a 346% increase over 2018
        > Silver production reached 787,476 ounces, representing a 249% increase over 2018
        > Ramp development advanced at Zimapan, Veta Grande and Rosario projects to support an increase in milling tonnage for 2020 at all three mines.

        http://santacruzsilver.com/s/news_releases.asp?ReportID=864870

    • On January 28, 2020 at 5:26 pm,
      Excelsior says:

      As for the Silver Developers and Silver Explorers it was mostly a flat to down day overall, but there were a few green shoots on the day, so it wasn’t all doom & gloom out there.

      > Symbol – Silver Developers & Explorers – Daily Change %

      ABRA.V AbraPlata Resource Corp. +30.00%
      WRM.AX White Rock Minerals Ltd +25.00%
      GPLY.V GR Silver Mining Ltd. +15.00%
      RYO.V Rio Silver Inc. +11.11%
      CCW.V Canada Cobalt Works Inc. +6.15%
      VIPR.V Silver Viper Minerals Corp. +3.70%
      KTN.V Kootenay Silver Inc +3.64%
      DV.V Dolly Varden Silver Corporation +2.17%
      G1A.AX Galena Mining Limited +1.69%
      AAG.V Aftermath Silver Ltd. +1.67%
      SVE.V Silver One Resources Inc. +1.54%
      DSV.V Discovery Metals Corp. +1.54%

  7. On January 28, 2020 at 8:26 pm,
    Matthew says:

    Today’s low for SLV was 16.28, the same as the 50 day MA and the Dec. 23 close so the large Christmas eve gap has been filled to the penny. Today’s closing price was 16.32, exactly the 50% retracement of the 11.5% move of early December to early January. There’s a confluence of supports not far below if we see some follow-through tomorrow.
    https://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=1&mn=5&dy=0&id=p89516680599&a=704177881

    • On January 28, 2020 at 8:49 pm,
      Excelsior says:

      It’s good, moving forward, that the Christmas eve gap was filled. There was a smaller mini-gap down near the 61.8% retracement at $16.12, so if there is any continued weakness that should backstop things as support.

      • On January 28, 2020 at 9:06 pm,
        Matthew says:

        I take gaps in the metals ETFs a little less seriously than other gaps since the metals they track often do not have corresponding gaps but I obviously do watch them. Here’s silver for comparison:
        https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=5&dy=0&id=p85908563346&a=500462915

        • On January 28, 2020 at 9:28 pm,
          Excelsior says:

          Yes, the purple/blue trendline should act as good support, or at least that top line of the green fork. I’d expect the low $17’s to be a pretty solid place for a bounce in Silver, where it puts in a higher intermediate term low.

  8. On January 29, 2020 at 8:09 am,
    OOTB Jerry says:

    Dang………..gold silver ratio…………back over 90 to1….

    • On January 29, 2020 at 8:56 am,
      Excelsior says:

      Yep. That is because Gold has been moving on the safe haven narrative, but Silver really hasn’t as much. In addition, Silver still has more catching up to do relative to Gold.

      • On January 29, 2020 at 9:12 am,
        b says:

        Yup.
        Maybe there is just very little interest in silver, low industrial demand as well as people may not have the funds to buy they once had.

        $500 silver if you want it and Shortage,Shortage!! is no longer believed.

        Again, gold up and my shares have lots of red or no movement…. again, still might be a better description.

        Looks to me the only people buying shares are people that already own them…the bugs.

        Gold on the other hand is being bought hand over fist if the articles are to be believed.

        Someone should talk Sprott into buying a few thousand tons, that might do it.

        • On January 29, 2020 at 9:52 am,
          Excelsior says:

          Gold’s more recent rise has been a more “generalist” investor rush to a safe haven, but as you mentioned, the folks in Jr miners are mostly just the same basic pool of retail investors and a few larger investors like Eric Sprott, Rob McEwen, and a few resource funds reshuffling money inside the sector.

          There were some new generalist investors buying the Gold, Silver, and mining ETFs in 2019, and larger volumes of new buyers coming into the Major and Mid-Tier Gold & Silver producers last year; but not enough of the “hot money” retail investors have come back into the smaller Jr miners.

          As the PMs continue to rise later in 2020, then Silver will catch up, and the miners will surge, and that excitement and the out-sized returns will bring in a new batch of speculators, and hopefully some of the younger Millennial investors that were animated by Cryptos and Pot stocks in 2017-2019. Also, there are many investors that got burnt in the resource sector since the last major peak in 2011, that stormed off threatening to never return, but if the miners start surging even higher, and if Gold gets into the $1600s+ and Silver gets above $20 and then some of them will eventually come back and reposition, adding to even more potential buying. They’ll need to “see it to believe it,” but by then the easier gains will have already been made.

          I’m still bullish on the Jr miners for this year and am holding through any short term weakness, and occasionally rebalancing gains from a few miners that have really run, into the solid companies that haven’t really moved as much.

          Good luck to everyone in their investments this year.

          • On January 29, 2020 at 10:11 am,
            Excelsior says:

            To the point above, now we can see mainstream outlets like IBD putting out articles coaching generalist investors how to buy gold stocks, but their advice is mainly around the ETFs and royalty companies in this article.

            _________________________________________________________________________

            Gold Stocks In Buy Range As Gold Price Nears 7-Year High On Coronavirus

            Jed Graham – 01/28/2020 – Investors Business Daily

            “The spot gold price rose to $1,582 per ounce on Monday, its highest closing level in nearly seven years, as investors sought safe havens amid the rapid spread of China’s coronavirus. This is just the latest threat to give a spark to gold stocks and create a burst of interest in gold investing. Is this a good time to buy gold stocks? If so, which ones?”

            “Gold stocks and gold ETFs are the simplest way for individual investors to bet on a rising gold price. Investing in gold stocks can be a riskier, but also potentially more rewarding, way of investing in the precious metal.”

            “Well-known gold mining stocks include Barrick Gold stock, Newmont stock and Kirkland Lake Gold stock. Another segment of gold stocks are gold royalty companies. These provide financing to gold miners, typically in exchange for below-market-cost purchase rights of gold they produce.”

            “Investing in gold stocks or a gold-mining ETF is, to a large extent, a leveraged bet that the price of gold will keep rising. That’s because a higher gold price can have a dramatic impact on the profitability of gold miners. For example, Newmont Goldcorp said its total cost of production amounted to $907 per ounce of gold in the first quarter of 2019. That meant increases in the price of gold above that level would go straight to the bottom line.”

            https://www.investors.com/research/gold-stocks-investing-price/?src=A00220&yptr=yahoo

          • On January 29, 2020 at 10:25 am,
            OOTB Jerry says:

            Just a note……..Observation from the Street, Boots on the Ground….
            I was at my local coin dealer , yesterday, ….we talked about silver, …
            the general comment from the dealer, was they said, “the general comment from the public or their clients, ….was…their clients are waiting for silver to break $22=23…

          • On January 29, 2020 at 11:22 am,
            b says:

            Speaking of people saying they wait until silver hits $20, there was a poster here months ago saying the same thing. “Not interested until silver is over $20”
            He/they could be right.

            Personally It looks to me real movement in shares may have to wait until after the doldrums.
            Ya never know of course.

          • On January 29, 2020 at 11:36 am,
            Excelsior says:

            Makes sense. Why would anyone want to buy silver at $17-$18, when they could just wait to buy it when the price goes higher and gets up to $22-$23. Haha! People are great.

            I guess the “buy low” concept is lost on most investors.

          • On January 29, 2020 at 12:17 pm,
            b says:

            To win at a card table you only need to be better than average….and the average card player is the pits.

            For traders there has been lots of opportunity in shares, we had that big win just as pot stocks got going. Forget when that happened.

            But for investors, thats another story, most people really dont want to watch a market as much as the PM market requires.

            There is alot of work required for them, does an averge joe have a clue how to do a DD for example?
            Not a chance.

            It makes perfect sense people wouldnt be interested until they can see it moving up.

            All thats required is to be in before the herd, the trick is to hope the value of the shares dont drop off a cliff before they move…and they could.

            But thats part of the game.

          • On January 29, 2020 at 12:23 pm,
            Matthew says:

            I’m glad for those that won’t be interested until silver is above 20. Our silver miners will be up massively by then and those people will help to take our shares even higher.

          • On January 29, 2020 at 12:34 pm,
            b says:

            Thats true Mat.
            Its just years of watching is not be worth it for some people.

          • On January 29, 2020 at 1:05 pm,
            OOTB Jerry says:

            b…….I agree with you
            Matthew …….I agree with you.
            Ex………….ha, ha……the sheeple will always be last….

  9. On January 29, 2020 at 9:42 am,
    David says:

    Silver:
    I can’t help but think JPM’s indicted criminal involvement in the Silver Market has not stopped. Waiting for silver to be as big of problem to the paper pushers as palladium currently is.