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Dave Erfle – As The Miners Bounce, Resistance Levels To Watch in GDXJ And GDX; And Why He Is Buying De-risked High-margin Developers

David Erfle, Founder and Editor of Junior Mining Junky, joins us to discuss the precious metals and the mining stocks.  We start off with a review of the recent  bounce in miners, and potential resistance areas that Dave sees in both GDXJ and GDX.  We also contrast the recent move higher in the PM mining stocks with the longer correction the PMs have been in since last summer, and the underperformance of the precious metals to many other sectors, including other commodities.  We wrap up with some insights on why Dave is doing a little buying of derisked high-margin developers with ample cash in the bank to survive any further weakness and continue their work programs into next year.

Click here to learn more about Dave’s newsletter – The Junior Miner Junky.

Discussion
27 Comments
    Oct 20, 2021 20:31 PM

    Gold Price Flag Suggests A Big Rally May Start Soon
    .
    Chris Vermeulen of Technical Traders.com – October 16, 2021
    .
    “As precious metals traders have waited out this extended sideways/downward price contraction in price over the past 14+ months, a very broad Pennant/Flag price formation is nearing an apex level, which suggests gold may begin a new rally phase over the next 60+ days.”
    .
    “Support near $1675 is a critical price level that has been tested three times over the past eight months. The true apex of the Pennant/Flag price formation will be reached near Nov. 15, 2021 – nearly 30 days before the US debt ceiling issue will become another big issue in Washington DC.”
    .
    “The apex level of these types of price flags typically suggests a potentially explosive price trend will initiate – possibly equal to the range of the Price Flag Range – in this case, more than $250. The current Price Flag apex level in gold is near $1800. A rally of $250 or more from this level would push gold up to levels near $2100 or higher if my research is correct.”
    .
    https://talkmarkets.com/content/commodities/gold-price-flag-suggests-a-big-rally-may-start-soon?post=331381

      Oct 20, 2021 20:35 PM

      Gold Stocks: Massive Buy Signals In Play
      .
      Stewart Thomson – Oct 19, 2021
      .
      “It’s essentially impossible to predict the exact endpoint to the building process of a head or right shoulder in a gigantic inverse H&S bull continuation pattern.”
      .
      “What can be said is that the rally from the head to the neckline is always enormous, and the wealth created by the rally from the right shoulder low to the math target of the pattern above the neckline… can be life changing for investors.”
      .
      “Tactics? The key is to focus on the miners when these fabulous opportunities present themselves.”
      .
      http://www.321gold.com/editorials/thomson_s/thomson_s_101921.html

    Oct 20, 2021 20:39 PM

    What Happens When The World’s Key Metal Exchange Has No Metal?
    .
    Bloomberg News | October 20, 2021
    .
    “What happens when the London Metal Exchange runs out of metal? That’s the question the exchange is urgently trying to address for its flagship copper contract, which sets the global price for one of the world’s most important commodities.”
    .
    “The dramatic drop in stockpiles that began in August and accelerated this month has sent the nearest LME contracts spiking to record premiums over copper for later delivery. That’s particularly painful for copper fabricators — companies that turn basic metal into things like wires, plates and tubes, and who tend to sell LME futures to hedge their price exposure.”
    .
    “But the emptying warehouses have also helped drive benchmark prices toward record levels and copper’s pervasive role in the world means that the jump in costs will add to wide-reaching inflationary pressure for manufacturers and builders.”
    .
    https://www.mining.com/web/what-happens-when-the-worlds-key-metal-exchange-has-no-metal/

    Oct 20, 2021 20:53 PM

    Is he suggesting stocks like SKE or SBB?
    What has happened to poor old NVO recently? It sure is taking a beatig.

      Oct 21, 2021 21:38 AM

      Very interesting with Novo that’s for sure. Market cap is a little over 300M.
      110M in New Found stock
      30M or so in cash
      A mill that’s worth at least 50M
      Everything else they have is being valued at about 30-40 cents a share.
      That’s cheaper than when Bob M. started writing about them years ago.
      I have been buying more.

        Oct 21, 2021 21:17 AM

        Nice breakdown of Novo assets Greg L. Yes, that places little values their production growth or all their other exploration and development assets with the ore sorting.
        .
        However, really good exploration results out near the mill today, and an 8% pop, so a good response on the drilling news.

          Oct 21, 2021 21:15 AM

          Yes. You are very right. Those are ore bodies they should be able to sort without trucking them for many miles. Or if the sorters turn out not to be effective, at least they can fill the mill with a higher grade.

    Oct 20, 2021 20:55 PM

    This 8s just an oversold bounce. Beware, everyone starting to talk bottom is in, same people who last year saying bull market and here comes $3K gold. Gold will bounce and miners severely oversold will pop over next month or two but watch out because gold will suck you in and disappoint again. Look for another test of 1700 area and gdx 30 early into new year and stock market bubble top into spring and then after stocks get that long awaited 10 PCT correction and drag miners toward those lows again that when you back up truck for gold and miners to slowly run up to new highs in 2023 be and maybe $3K in 2024.

      Oct 20, 2021 20:30 PM

      It’s possible this is just a relief rally before another leg down in the PMs, but as for your comment that:
      .
      “everyone starting to talk bottom is in, same people who last year saying bull market and here comes $3K gold.”
      .
      I’m not sure who all these people are you are even referring to? I can’t think of anyone that was brought on the KE Report or any contributor on the blog that was calling for $3K gold last year or this year. Not one. Can you provide some examples of all the people that were calling for $3K gold last year or this year? Based on your comment there were a number of people here making this claim, and I’ve read most of the blogs threads and listened to most interviews on here for years don’t recall that.
      .
      Now, longer term by 2023 or 2024, it would not surprise me to see Gold at $3,000, but nobody has been calling for that kind of pricing imminently nor were they calling for it all year or all last year, unless I missed a bunch of interviews and comments. It’s possible you mean the editorials on Kitco with some folks, but I’d hardly call that an idea that anyone here was pushing seriously for 2020 or 2021.

    Oct 20, 2021 20:56 PM

    Centrex Minerals (CXM) up 213% in Sydney this morning.

    BDC
    Oct 20, 2021 20:11 PM

    Shock-Wave GOLD : https://postimg.cc/qzwNsVxj

    BDC
    Oct 20, 2021 20:27 PM
    Oct 20, 2021 20:37 PM

    Gold is ready to break out. The same fork resistance that capped it last week is at about 1797 tomorrow while there is rising fork and MA support at 1763 and 1757. The hit gold took on the 15th delayed more energetic moves in the sector by about a week and the bullish picture is probably better off for it since it has kept many fearful.
    https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=8&dy=0&id=p99646057460&a=1043235982

    Oct 20, 2021 20:51 PM

    This will be silver’s 5th week higher; it’s best run by far since over a year ago when it went up for 9 weeks straight while going vertical. It is also about to close a week above the weekly KAMA (a very useful moving average) for the first time in almost 5 months.
    https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=5&mn=6&dy=0&id=p40380743219&a=679857650

    Oct 20, 2021 20:11 PM

    Two to three weeks ago was clearly a very pivotal time for the sector. While risks remain, the picture is very different now since the miners made some impressive technical advances to go with their price advances.
    https://stockcharts.com/h-sc/ui?s=%24XAU&p=D&yr=1&mn=5&dy=0&id=p46710025426&a=1047250562

    Oct 21, 2021 21:20 AM

    The dollar has put in a double top and generally does not look good.
    https://stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=1&mn=0&dy=0&id=p79122440956&a=1047346933

    BDC
    Oct 21, 2021 21:42 AM

    SPQ: https://tinyurl.com/2vc9pznu
    Possible PM Full Moon Turn.

      BDC
      Oct 21, 2021 21:43 AM

      PTL : Released from Posting Purgatory!

    Oct 21, 2021 21:35 AM

    Alternating day price suppression of miners continues for my account. The more they continue to intervene, the more I am convinced of The Political threat of Physical gold and silver to the charade of fiat currency and debt.

    BDC
    Oct 21, 2021 21:01 AM

    SPQ: https://tinyurl.com/2vc9pznu
    Possible PM Full Moon Turn.
    Time: 20211021.1001

    (This was posted pre-market with an edit. Lost for now!)

      BDC
      Oct 21, 2021 21:21 AM

      Refreshed page before “Click to Edit” disappeared. Likely the problem!

      BDC
      Oct 21, 2021 21:16 AM

      Turns also possible in Copper, EVs, Oil.
      Uranium remains questionable.

    Oct 21, 2021 21:30 AM

    Silver is outperforming over gold, is Bitcoin taking the monetary value away from silver and making it a pure industrial metal? IMHO I don’t know… haha! Bitcoin has been around just over a decade and pms as money for a couple thousand years, history will prove which is king.

    https://stockcharts.com/h-sc/ui?s=$GOLD:$SILVER

    Oct 21, 2021 21:43 AM

    SALT-2 million cross,this morning(clarus-U.K.)

    Oct 21, 2021 21:51 AM

    metals can’t recover from a one day drop last friday over the past week. The illusive cross of 1800, shouldn’t be this problematic.

      Oct 21, 2021 21:34 PM

      Yes, it would be ideal for Gold to get up the through the $1800 level on a closing basis, and preferably on a weekly closing basis. Ideally, it would be best to clear $1840 on a closing basis to get any really momentum going again in the PM sector.