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Key targets to watch for the USD, gold, silver, GDX, SILJ

Cory댊
July 20, 2021

Steve Penny, Publisher of the SilverChartist Report joins us today for a look at the charts for the US Dollar, gold, silver, GDX, and SILJ. After a rough day for almost every market yesterday, including gold and silver stocks, we focus mostly on upcoming downside support for GDX and SILJ.

Click here to learn more about the SilverChartist Report and to follow along with Steve and his trading strategy for the metals and other resource sectors.

Discussion
49 Comments
    Jul 20, 2021 20:28 AM

    People buy dollars by default when they dump stocks which is why it has had a boost lately. It’s not that most people want to hold dollars instead of something else. So, dollar strength will likely be fleeting as newly cashed-up people will look for something else to buy.
    Maximum reasonable upside is probably around 94.50, where the 200 day MA will meet fork resistance…
    https://stockcharts.com/h-sc/ui?s=%24USD&p=W&yr=6&mn=7&dy=0&id=p22991838283&a=818135567

      Jul 20, 2021 20:13 AM

      That makes sense to me as well Matthew. It would seem many investors sold profitable trades (or crashing trades lately) in the general markets to move to cash (dollars) and will be looking to redeploy, so it isn’t so much that people want dollars as much as they are in cash waiting to buy something else. It is similar with bonds in that many large institutions likely pulled some profits on their big moves higher in the general stock markets and stashed those holdings in bonds for the short-term.

    Jul 20, 2021 20:26 AM

    That’s a good point. A lot of Dollars being collected from the sell off in Chinese companies like BABA, BIDU, DIDI.

    Jul 20, 2021 20:34 AM

    Back to alternating day pattern and break even. They need a new algo.

      Jul 20, 2021 20:19 AM

      I’d postulate that after the big sell down yesterday in many of the resource stocks, that investors are nibbling at the sold off stocks, and thus we had more of a green up day today. I know I’ve been active today adding to positions with funds raised from taking some tax loss sales over the last 2 days, and have done more trading the first 2 days of this week than I have in the last few weeks combined.

        Jul 20, 2021 20:33 AM

        This time of year the volume can be so low that one person selling stocks to raise money for their mortgage payment will affect the price for hours.

          Jul 20, 2021 20:49 PM

          Agreed Dan. We’ve seen plenty of stocks where selling the last 2 weeks was rather low volume, but it still moved the shareprice in an outsized way, and there were not enough buyers to come in to support it. In the last 2 days in particular I’ve sure done my fair share of selling, but also my fair share of buying. 23 trades yesterday, and 38 trades so far today, and I may take that up to 40 trades for good measure 🙂

            Jul 20, 2021 20:57 PM

            I also took this opportunity to initiate a few new positions with some of the funds raised in taking some tax loss sales early.

            My thesis is that most of the producers (large & small, and both Gold & Silver) are doing just fine at current metals prices. Same thing for developers with projects that work fine at $1500 gold or $18-$20 Silver, so at $1800 gold, and $25 Silver, they are still way above water from an economic standpoint. In addition I peppered some funds around to royalty companies that had pulled back recently as a more “safe” area for those funds.

            On the higher end of the risk curve, I’ve also put on more positions based on exploration work than in any other year, which makes me a bit nervous, but when companies are hitting with the drill bit they are getting traction with investors. There are so many established companies in concert with up and coming exploration companies that are cashed up and drilling right now, or awaiting assay results, that my goal is to have a few of them in the basket hit good results, and a few hit great results, (and I expect some will also disappoint, but don’t know which they’ll be).

    Jul 20, 2021 20:16 AM

    The New Precious Metals

    Sean Brodrick – July 20, 2021

    “We may be headed for war. A resource war.”

    “But it won’t be over oil, or spices, or water or any of the other things that previous wars have been fought over. No, the next war is more likely to be over rare-earth elements (REEs).”

    “What makes these elements so valuable is they’re used in virtually every important electronic technology sweeping through the world right now.”

    “The smartphone you have in your pocket, for example, contains no fewer than eight rare-earth elements …
    … while each F-35 fighter jet has about half a ton of them.”

    “And demand is rising rapidly. The global REE industry is expected to nearly double from $8.1 billion in 2018 to $14.4 billion in 2025.”

    “The problem? China has a VICE GRIP on the world’s supply…”

    https://wealth-wave.com/wealth-wave/new-precious-metals/

      Jul 20, 2021 20:55 AM

      REE’s are not so rare are they? It’s the processing of them into usable products which China has a grip on.

        b
        Jul 20, 2021 20:28 PM

        Thats what Ive read Terry, rare earths are not rare.
        Cant see war over them.

        War over Taiwan could happen if the U.S. doesnt get their nose outta there.

          Jul 20, 2021 20:06 PM

          We could see a skirmish right here in North America if those imperial Canadians don’t stop sending their miners to take U.S. gold. 😤 😬

            Jul 20, 2021 20:09 PM

            Haha! Good one Matthew! 🙂

            Jul 20, 2021 20:44 PM

            I do not mind if Canadians take U.S. gold and silver as long as I own shares in their companies.

            Jul 20, 2021 20:49 PM

            Agreed Bonzo!

            Jul 20, 2021 20:54 PM

            You know, I don’t think you guys realize that for just one extra ounce of gold per month, the average Alaskan (America’s most indebted people to credit card companies) could be free of credit card debt in just 5 months. Please, stop the madness. 🙏🏻

            Jul 20, 2021 20:40 PM

            I’d like to see that skirmish. Send some troops north and remove that dictator. Install a democratic government up there.

            Jul 20, 2021 20:14 PM

            Sadly, Biden is more likely to put that dictator on his lap and give him a cookie.

          Jul 20, 2021 20:08 PM

          Yes, Rare Earths are not rare, (and Sean made that same point in the article if anyone opened it and read it), but the point is that what is rare are having concentrations that are economic to extract, as the processing and separation is much more complicated than something like Gold or Copper or Oil. It is more on part with how Lithium is also complicated to process and extract, but even more so as often there are radioactive elements involved. This is what gives Energy Fuels, a Uranium and Vanadium producer, such a leg up on many companies as they move towards processing Rare Earths from other companies tailings and waste rock, because they have all the experience and permits to process radioactive materials.

          As for the China factor, it has ALREADY been a big issue several times in the past where they fiddled with their export quotas in a way that was crippling supply chains in many areas from tech devices, to green energy windmills, to defense applications in the US, Europe, and Australia, until it reached a crescendo point where China was forced increase their exports of REEs again. This time they may be less willing to comply after that last few years of harsher tariffs and push back from the western nations on other initiatives they have (including how citizens were treated in Hong Kong, what may become of the currently independent Taiwan, and a few other islands in dispute near Japan).

          Just like the strategic importance of sourcing Uranium outside of Kazakhstan is becoming more recognized, there are many in the Americas and Europe waking up to the importance of having a supply chain of Rare Earths outside of China, which at present is only 2 dozen companies with any potential.

            Jul 20, 2021 20:24 PM

            (UUUU) (EFR) Energy Fuels and Neo Performance Materials Announce Contract Signing and Launch of Commercial Shipments of Rare Earth Product to Europe in Emerging U.S.-Based Rare Earth Supply Chain

            July 7, 2021

            https://www.energyfuels.com/2021-07-07-Energy-Fuels-and-Neo-Performance-Materials-Announce-Contract-Signing-and-Launch-of-Commercial-Shipments-of-Rare-Earth-Product-to-Europe-in-Emerging-U-S-Based-Rare-Earth-Supply-Chain

            Jul 20, 2021 20:32 PM

            I’m a sheeple sometimes and don’t like reading boring stuff.

            Jul 20, 2021 20:39 PM

            I sure don’t think you’re a sheeple Terry, but I also don’t think Sean’s article on REEs was boring either, but we each are animated by different areas of the market. As someone that has followed the Rare Earth sector since the last boom from 2010-2012, and the subsequent peaks and valleys in various prices, along with the supply/demand drivers, I am of the opinion that there will be an opportunity for the legitimate REE companies operating outside of China, and in particular the North American, European, and Australian mining stocks that have been in the game a while and are onto a potentially economic deposit.

            With Energy Fuels, they just stand out as different in that they are processing ore to extract REEs at their White Mesa Mill and are partnered with one of the more solid down stream processors and fabricators with Neo Performance Materials.

            Jul 20, 2021 20:44 PM

            I’m also just getting a little burnt out on trite mining mantras that don’t mean much like:

            “Rare Earths aren’t that rare, and they aren’t earth.”

            (yeah, yeah, yeah, that is a cute slogan, but doesn’t help investors in the slightest, and misses the point. Gold and Silver and Oil and Uranium and Lithium aren’t that rare either, but they have the same issue of finding a deposit that is well-endowed and concentrated enough to be economically viable to extract).

    Jul 20, 2021 20:25 PM

    Bonzo just cast his fate to the winds and loaded up on NULGF at 9 cents. John Kaiser says if they find something as big as Goldrush the stock could go to $2.80. If they find another Betze-Post it could be worth $15 or $20 a share and Bonzo will retire. Wait, Bonzo retired in 1981 and has been playing the market the last 40 years.

      Jul 20, 2021 20:38 PM

      Bonzo, why didn’t you wait for NULGF to go back to $.05 cents again. You could load up and own the company then and be on the board?

        Jul 20, 2021 20:31 PM

        Doc, I thought it might have bottomed at 8.5 cents. I will buy more at 5 cents if it goes there. Are you walking the Big Mac bridge walk on Labor Day?

    Jul 20, 2021 20:57 PM

    If CDE has a weekly close under 7 this month, the odds are very good that you’ll be able to pick it up again for 4-5 dollars.

      Jul 20, 2021 20:11 PM

      And then it will quickly double to $9, as it did before Christmas 2008.

      Jul 20, 2021 20:18 PM

      Well Doc, that’s a bummer of a comment on Coeur.

      Personally, I had trimmed back a lot of my CDE position earlier in the year to rotate into stocks that were more beat up at that time, selling some Coeur on (02/22/21) @ $9.39, selling more on 03/15/21 @ $10.02, and then another tranche on (04/01/21) @ $9.37.

      Yesterday, I added some CDE for the first time in a while @ $7.23, thrilled to get it much cheaper than where I’d trimmed earlier in the year, and now you have mentioned a $4-$5 target.

      Sounds like I just overpaid for the Candy. It just went from sweet to bitter in my mouth… 🙁

        Jul 20, 2021 20:21 PM

        Doc, I do thank you for the (CDE) target though, and I’ll pick up some more if/when it gets down into that $4-$5 range you mentioned.

        What are your thoughts on Hecla? I picked up some (HL) today at $6.46, but I’m sure you are looking at lower targets. Where do you think it may be at a good support level to accumulate another tranche?

          Jul 20, 2021 20:33 PM

          While I’m at it Doc, I’d like to get your thoughts on Sandstorm (SAND) – Where do you see a good level to accumulate it?

          I had bought some (SAND) in tranches earlier in the year on (01/08/21) @ $6.95, on (01/12/21) @ $6.98, on (01/15/21) @ $6.74, on (01/29/21) @ $6.50, on (02/04/21) @ 6.27, and on (02/26/21) @ $6.11. Then I sold in a few tranches on (04/15/21) @ $7.74, then trimmed more on (05/24/21) @ $8.40, and a bit more on (06/04/21) @ $8.54, but left the rest of the position in place as a core position.

          Today I decided to throw another SAND log onto the fire @ $7.34, but had a feeling it may be too soon to start nibbling. Sandstorm is cheaper now then where I was trimming it in May and June, but I have a feeling you are going to tell me it is going to get cheaper. It would be nice to get a general sense of a price target where you’d be willing to add more if you get a moment.

            Jul 20, 2021 20:57 PM

            Ex, I believe that you will be able to get HL in the lower 5s sometime in early August—then I would look at the chart again to see if the bottom is in at that level. I, like you own SAND at lower levels and I believe we’ll see 7 and then we may get some equilibration before potentially heading a little bit lower to the 5-6 level.

            Jul 20, 2021 20:05 PM

            Sounds good Doc, and thanks for sharing those targets for where we may see more pricing support come in.

            I’ll like look to add more to Hecla near $5, and Sandstorm in the low 6’s to high 5’s. Just a waiting game for now…

            Jul 20, 2021 20:26 PM

            SILJ looks a lot better than HL at the moment and for some time to come, at least risk adjusted. The reason for that is HL’s superior performance this year and into June.
            Both are probably going up tomorrow.

            Jul 20, 2021 20:50 PM

            That is interesting on SILJ versus HL, and synchronistically, I also bought some SILJ for the first time in a long time today @ $13.20, figuring it would be an easy to trade ETF vehicle to store some tax loss sales funds in for the 30+ days to get through the wash period. If it outperforms HL and some of the Silver stocks in the portfolio over the next month or so, then I’ll deconstruct the SILJ position over time and rotate it in pieces into the underperformers.

            Jul 20, 2021 20:06 PM

            On a related note, my personal goal with the portfolio of individual stocks is to outperform the ETFs and mining stock indexes, (like anyone’s goals with individual stocks should be or it makes more sense to just buy the basket via a fund). Over time and on most key days my portfolio does outperform GDXJ and SILJ, but I just figured when adding to a few of the more diversified royalty companies (like Sandstorm, Metalla, Maverix, Elemental, and Nomad) that I’d mix in some SILJ as well for a similar “set it and forget it” approach, where that position would not have the same risk profile as a single asset miner. To a lessor degree, adding recently to some of the multi mine producers (like Hecla for example) also gave me some exposure to operational growth and leverage to metals prices, without the same risks that I was taking by adding in so many exploration drill plays.

    Jul 20, 2021 20:31 PM

    David – If you see this, I just now got back to you on the Ed M. blog from yesterday.

    Cheers!

      Jul 20, 2021 20:43 PM

      I also just got back to you and a few other folks on the John R. blog from yesterday. Sorry for the delayed response, been a bit covered up today. Ever Upward!

    Jul 20, 2021 20:21 PM

    For all you fishermen out there, take into account that the proverbial hook has been set. Why has gold not been thrashed by now? Bullion banks are shorting the miners until they get positioned. Then we’ll get this massive rally that Doc has been historically touting

      Jul 20, 2021 20:55 PM

      Buzz

      This is old news! Go back and read the old post since august high. Me and doc lead the way practically the only ones saying miners down while we were told we did not know how to read charts lol. Kicked in the ass, spit on and remarks like half a brain, don’t waste your time on him etc just some of the nasty words used. I say this once and I say it again, this board is bullish honey but dislikes hearing the truth.. I seen it since august maybe some of you just don’t want to hear it but guys like b, Jerry , doc and even ex heard when I said repeatedly the pattern of the miners was m pattern code for double tip while david and others were saying bull flag. Then we are told we don’t know how to read charts. Let this be a big learning lesson for many of you in hear who don’t listen to words of wisdom. The bleeding is not over as doc has suggested including myself. Impact will hit my guaranteed price and probably head down towards .29-.31. The monthly charts is what matter forget the rest.

      Glen

        Jul 20, 2021 20:24 PM

        Since you must bring it up every time the market scares you, I must point out that my comments about certain chart readers here were not wrong. There is no excuse for missing the “candy store” opening in March and there is also no excuse for thinking the candy store is not yet open this time.
        “Nasty words” were the result of your tiresome and misdirected attitude, not your targets. You approach the market and charts completely differently yet want to engage me as if you understand my approach.
        You will never catch a turn in a timely way if you use the monthly chart and forget the rest. Perhaps that’s why Doc has never once identified an important low and said BUY. Instead, he has been bearish at, and even after, every major low.

          Jul 21, 2021 21:20 AM

          Hey Matt,
          Ramb
          is buying intital positions in both DUST and JDUST when it corrects back to the neckline from yesterdays gap. Yikes….is he smelling one last waterfall decline? I hope not!

            Jul 21, 2021 21:47 AM

            Rambus appears to follow a price-only discipline and some standard objective “rules” like selling the backtest of newly broken supports and there’s nothing wrong with that. In fact, it’s a fine approach. I do recall that he bet bearish like that in recent months (maybe the March low?) and nailed the low. In other words, he had to reverse his position immediately. That’s not a criticism. He acts on developments in front of him, as do I, but his signals are purely based on price. It doesn’t matter how many bad trades he has for every good one as long as he manages his risk well and is good at getting the best out of the winners.
            I’ve shared the following before and it is worth keeping in mind:
            https://www.financetrendsletter.com/2016/08/maximize-your-gains-not-wins-william.html

            By the way, I hope Marin Katusa has been forthright about the source of “his” “alligator” trading approach.

          Jul 21, 2021 21:53 PM

          Ditto in spades!!!

        Jul 20, 2021 20:15 PM

        Glen, since august my take is you have been outright bearish, and bullish, and waiting for signs of a blastoff and at same time for signs of a meltdown. You can’t possibly be wrong with those projections.

          Jul 20, 2021 20:23 PM

          Most here are gamblers. They only become investors when they overhold what they initially gambled on, hoping for a recovery.

    Jul 21, 2021 21:15 AM

    All good stuff above………….

      Jul 21, 2021 21:16 AM

      Glen,…… thanks for the mention…… up and down….. everything is an opportunity… 🙂

        Jul 21, 2021 21:02 PM

        The bigger picture extols massive GOVT corruption until Biden & sons are removed from office. Besos can blast off all he wants. At the end of the day, eternity isn’t going anywhere