Silver stocks are holding up very well – Is it the PM or industrial metal narrative?

November 12, 2019

Dave Erfle joins me today to chat about the gold and silver charts. With gold holding $1,450 and GDX holding 26 this could be a good region for a bounce. Plus look at the silver stocks, these are the strongest of the PM sector. Dave also shares some tips on looking at the stock prices to determine which are the best options to buy when gold and silver turn.

Click here to visit Dave’s site and learn more about his newsletter.

    Nov 12, 2019 12:11 PM

    Stop it with your encouragement of gold miners. Fact is we been listening to you gold newsletter guys pushing the hype in metals since May. Just admitt this is another false breakout and without a stock crash or big inflation returning its all hype. Market and economy still strong even with all those tariffs, so even if trade deal stalls mkt wont crash just profit taking, gold will bounce but fact is its going nowhere just false moves. You’ve been wrong for long time just want to sell subscriptions, only true calls were Doc and Roy-Byrne calling for retest of 2016 in order to build another base.
    No stock crash, no inflation, no wars so gold going nowhere except trading in new low range.
    Tell what going to get us to 1600 if no crash, no inflation, no war just stocks keep growing on good economy. Yes will have profit taking maybe a nice one like last December but it will be great buying for stock mkt not gold unless you can make good entry on dips in gold. Heck not too many people making money in miners, manority watch on paper values went up and now back down. On few have held up but best profits were in stock mkt.

      Nov 12, 2019 12:08 PM

      I hate to break it to you but there is nothing “false” about gold’s breakout and a “good economy” wouldn’t need the Fed’s recent interest rate cuts. Look at the following chart and you’ll see that gold has been in a steep uptrend for over a year and that uptrend is inside of a shallower uptrend that began almost 4 years ago.

      Even within a bull market, very scary corrections are a fact of life and this one has been mild. So your negativity is not logical or warranted. Gold is still up over 20% since this day last year and GDX (the biggest safest mining ETF) is up well over 40% (80% at the recent high). Since the 2016 low, GDX is up 118% (155% at the recent high). Countless individual miners are up a lot more than that.

      Since November 2018, GDX is up 30% versus the Dow (62% at the recent high).

      If you don’t like volatility, this is not the sector for you.

        Nov 12, 2019 12:23 PM

        +2 about how “good” of an economy we have with the FED cutting rates, and the point that this corrective move hasn’t been that dramatic in Gold. For goodness sakes, last year at this time in August of 2018, Gold dipped down to $1167.10 (which was still putting in a higher low).

        After that late summer plunge, Gold then popped up briefly, but then back-tested $1180-$1200 in Oct/Nov before starting the next leg higher that blew past the 2016 high and actually surged up to $1566 this August. Thatโ€™s a $400 plus move of the last intermediate low of $1167, and a $550 move off the major low at $1045.40.

        There were just as many negative nancies last year that thought Gold’s move was over and that 2016 was just a fluke (which clearly it wasn’t for anyone with a clue or a set of eyeballs to look at a chart).

        Investors sentiment sliding at this time of year is so predictable (we’ve seen it happen now 6 years in a row at year end tax loss season).

        Maybe folks have such extreme recency bias or amnesia that they’ve already forgotten many Gold and Silver miners had fantastic moves from the end of last year to this August….. many were up 50-250%.

        Those gains in the Gold and in particular the Silver miners destroyed anything seen in the general stock markts and almost every other sector, so the comment that the “best profits were in the stock market” are complete nonsense.

        Really, did the stock market double or triple this year? (lol) Poppycock.

        The moves in the miners were quite epic from this time last year to August, or hell even from May to August, but once again, many investors that were overly bearish in the next leg of the bull market missed the move, so all they see are today’s prices and not where they had stretched up to just a few months ago.

        Clearly for any investors following these markets the last few years, and truly “buying the dips” or positioning during the corrective moves, were able to make money. The upward moves in 2016, the Q1 run of 2017, the Fall rally in 2017, the Q1 run in 2018, the Fall rally of 2018, the Q1 run of 2019, and the most recent Summer rally of 2019 were all great opportunties to make money in the miners for those that actually bought the dips along the way, and trimmed or sold into the strength. I didn’t completely sell out during the rips, but I sure as hell took some of the winnings off the table to book some profits when stocks I had went up 100-200%+.

        What is mind-boggling is how some folks can’t register that a $550 rise in Gold from Dec 2015 to August 2019 is a bull market. Gold didn’t crash from $1045.40 down to $500, it rose from $1045 to $1566 (ding, ding, ding…. that’s called a clue).

        There was no single reason that Gold rose over the last 3 years either, as it was a mix of fears of global slowdown, FED and other central banks policies from the EU, Japan, and China, the trade wars, Brexit, the crypto explosion/implosion, and the technical price action following through a Bull market that started when Gold put in it’s Major low back in Dec 2015.

        Bear markets are the authors of Bull markets. The Gold bear market was Sept 2011 – Dec 2015. After the bear came the baby bull, and it charged so hard in 2016, that it needed 2 years to work off the extreme overbought condition and get sentiment back down again. The end of last year was that moment, and then overall 2019 has been a fantastic year in the metals…. yet some are still whining. (which tells me they missed the move up in the metals and miners).

        Some things never change….

          Nov 12, 2019 12:29 PM

          Here is a Gold chart showing the larger trend higher the last few years.

          For those struggling with the concept of what a Bull market move looks like here’s the brief idea:

          Bull markets go up over time to make higher highs and when they correct they put in higher lows, and Bear markets go down over time to make lower highs and lower lows. This isn’t rocket science. See if the trend on this chart gradually climbs higher from Dec 2015 to present, or if it crashes down lower and lower from that point. ๐Ÿ˜‰

            Nov 12, 2019 12:35 PM

            Unfortunately I didn’t save any charts that showed the total moves higher from low to high, but I had posted a number of silver miners charts over at in the summer.

            These are just a few static charts saved over there that simply show a snapshot in time over a 3 month period, but the gains destroyed anything seen in the general stock markets this year. If investors missed these, that is on them.


            3 Month #Chart โ€“ Jr Silver #Producers (posted August 9th)



            Nov 12, 2019 12:36 PM

            3 Month #Chart โ€“ Sr Silver #Producers (posted Aug 9th)

            $FR $CDE $SSRM $PAAS $WPM $HOC.L $SMT $FRES.L $HL


            Nov 12, 2019 12:37 PM

            3 Month #Chart โ€“ Jr Silver #Developers



            Nov 12, 2019 12:37 PM

            3 Month #Chart โ€“ Jr $Silver #Developers & #Explorers



            Nov 12, 2019 12:42 PM

            Again those static Silver mining charts were just what I posted one day on August 9th, and by no means captured the entire moves higher from Tax Loss 2018 to late August, or even from May to late August, but they illustrate the point plenty fine, that there were awesome gains to be made in 2019 for people that were properly positioned and trimmed in late August or early September.

            Those that missed it lost out, and probably missed most of the big gains in 2016, or the Q1 run of 2017, 2018, and 2019 as well.

            Those same people will likely get all negative here at year end, and miss the gains in the Q1 run of 2020 or the rallies later next year.

            Maybe when Gold is at $1600 or $1700 they’ll get off their rears and find some conviction when half of the move higher is off the $1045 low has already been put on the books. ๐Ÿ˜ฎ

        Nov 13, 2019 13:14 AM

        I agree gdx is up but everyone is not buying etf their recomending mostly exploration plays which went up and back down so most people encouraged for further breakout in gold really just held those explorers and watch those gains evaporate. Stocks on other hand held breakout and proven profits.
        Im not saying you shouldn’t be in metals with small portion of portfolio Im just saying they keep pushing that you need mkt crash, war or conflick, inflation to really have gold breakout to 1600+ in order for these high risk explorers to hold those gains and it not happening. Or be the needle in haystack and have drill results finding big deposit. Just stop hoping for stock crash to benefit gold stocks. Avg person has 10 pct in metals why would you want stock crash and hurt your core investment to make small profit in gold. If inflation comes then thats your insurance not for crash. Wake up.
        Your investing in lotto ticket.

          Nov 13, 2019 13:31 AM

          I am wide awake, Paul, and I love the volatility that the sector provides. If you don’t know what to do with volatility, avoid it or figure it out.

          No stock market crash is necessary for gold to do very well. Those claiming otherwise don’t know what they’re talking about.
          1.) Between October 2002 and October 2003, gold went up 160% while the S&P 500 went up 105%.
          2.) Both went up together following the 2008 crash.
          3.) Gold gained 50% since bottoming in 2015 while the S&P 500 gained 56%.

          Number 3, by the way, illustrates a big phantom gain for stock investors. Gold is money and the dollar is merely a claim/debt so that 56% gain is really a 6% gain (since gold gained 50%). Yet, for tax purposes, the gain is treated as real. This is why smart money goes to the gold miners when conventional stocks fail to outperform gold. The big gains offered by the miners can make up for a lot of inflation related losses. Lo and behold, GDX gained three times as much as gold since 12/2015.

          If you want to know how stocks (or any asset) is really doing, price it in gold. Doing this shows that stocks peaked over a year ago and are really down 13.3% despite recent 15.3% move off the recent low.

            Nov 13, 2019 13:34 AM

            Oops, big correction: Example 1.) Between 2002 and 2007 (not 2003).

          Nov 13, 2019 13:40 AM

          Of course SILJ smoked GDX following the 2015 lows when it went up as much as 5-fold. Learn to capture the bulk of such moves and you can sit on your hands for years as you wait for the next opportunity. Yes, that is much easier said than done but because of shortcomings of the charts/technical tools. The biggest problem for most investor is right between our ears. And for even more investors, that problem is massively compounded by the failure to realize or accept that fact.

            Nov 13, 2019 13:42 AM

            Correction: “…but NOT because of shortcoming of the charts/technical tools.

      Nov 12, 2019 12:41 PM

      Paul, there is plenty of inflation and war. Most investors don’t have even the vaguest idea of what their stock is worth. Few investors care about actual worth all they want to see is are prices going up. All kinds of dubious financial practices have been going on. Trouble is brewing, The Fed is trapped, the rich with their financial analysts know what the little guy doesn’t, it is time to get out of the conventional markets, what is going on is madness. I don’t expect you to understand me because you are probably holding a lot of stock that would cause you great grief if the market collapses. DT

        Nov 12, 2019 12:51 PM

        Determining what any stock is worth can be a fools errand, as some stocks never get close to their “value”, while other nonsensical stocks reach values that climb to nosebleed levels (think cryptos or potstocks or a drillplay with a newsletter writer pumping it)….

        The goal of investing is to make money, and not lose money. All that actually matters is that you buy the stock for lower than you sell it for, and book a profit in a reasonable time (based on one’s investing strategy). Call me old fashioned, but I only care about buying low and selling higher and getting an out-sized return.

        There is no need to marry a position or hold something waiting for 10-15 years hoping to make a paltry 10-20%. Every day there are Junior miners that pop double-digtis, while others drop double-digits. Each year there are miners that go up 200% 400% 1000% and others that drop 70-99%.

        The whole point is to make gains in investing, so all that matters is price, and the judge and the jury is price action. This is why technical analysis is important, and also why good fundamental analysis is key, to spot inefficient markets, look for an unrecognized opportunity, and pair it with macro forces that create a tailwind for the sector invested in.

        Good luck to all in their investing and remember the upcoming tax loss season is the time to be looking for value, not crying in your soup. Then when every one feels chipper in Feb & Mar, sell to those folks and book gains. Rinse and repeat…

      Nov 12, 2019 12:55 PM

      Thanks Cory and David for a good interview and conversation today. I agree that the Silver miners have held up better than Gold, but some of that is because they were far more oversold than Gold and the Gold miners before the move up in 2019 occurred, so they simply had more ground to make up.

      It doesn’t need to be their industrial component is getting a bid as trade tensions ease, (or to Cory’s point Copper and Lead and Zinc would be doing much better). The Silver stocks just outperformed once the next leg of the PM bull got underway, just like if we get more sustained weakness, they’ll outperform to the downside.

      We see it over and over and over again. I actually hope the Silvers do pull back hard over the next few weeks, so I can reload for the Q1 Run of 2020.

        Nov 12, 2019 12:00 PM

        Also, investors should keep in mind that seasonally, it is better to buy Uranium stocks in November, and then the miners in December, if past patterns rhyme again over the next few months.

        There are no guarantees and no 2 years are exactly alike, but often U stocks bottom in November and then take off in Dec, Jan, Feb… and the last 5 years, buying the Silver and Gold mid-tier producers, small producers, developers, and a few select explores in December, and riding them up until late February or early March has been a winning trade.

        It looks like a similar pattern setting up once again, with sentiment super low in Uranium at present, and getting worse and worse in the PMs each week lately. If sentiment washes out in both over the next few weeks, it is time to hold one’s nose and go shopping for the best of the worst.

      Nov 13, 2019 13:55 PM

      Although you are entitled to your opinions, I take offense to this statement: ” Youโ€™ve been wrong for (a) long time (and) just want to sell subscriptions.” If you would have bothered to visit my website before posting this falsehood, you would have seen the performance totals (up over 140%) since beginning my REAL MONEY junior portfolio in January 2016. You would have also seen every single article I have ever written, along with each interview given linked there as well, which proves I have NOT been “wrong for a long time”. I also have 250 subscribers, along with a waiting list of over 60 more, so I must be doing something right. I cap my service at 250 and the service has been full for three months, so “just wanting to sell subscriptions” is clearly not the reason I do these weekly interviews. My website, along with the JMJ subscription service, is completely transparent. All of my trades, along with real money gains and loss totals, are there for all subscribers to see and I also notify them of each trade BEFORE it is placed. Best of luck with your investments.

        Nov 13, 2019 13:07 PM

        I’m not a subscriber but you’ve sure seemed more right than wrong based on your interviews — and by a good margin.

          Nov 13, 2019 13:50 PM

          +1 Agree Matthew. Keep up the great work David, and we absolutely appreciate hearing your insights here on the KE Report each week.

          We are also Jr Mining junkies and enjoy the perspectives.

            Nov 13, 2019 13:05 PM

            Same to you Ex. You are a valuable contributor to this show and have presented very thoughtful and prescient comments which I have valued greatly. Best of luck and thanks for having my back!

            Nov 13, 2019 13:27 PM

            Thank you for the kind response David and of course. Keep up the great work!

          Nov 13, 2019 13:00 PM

          Much appreciated Matthew and best of luck.

    Nov 12, 2019 12:27 PM
    Nov 12, 2019 12:16 PM

    Trump, (doing well), needs to find his way back to the Minuteman.

    Nov 12, 2019 12:42 PM

    Mining Giant Ross Beaty’s Race To Build A Senior Gold Producer

    by @Goldfinger on 12 Nov 2019

    “His Equinox Gold (TSE:EQX, NYSE:EQX market cap C$915 million) has lept from a developer to a mid-tier producer in under two years.”

    โ€œI want to make it very clear that Equinox Gold is not building itself to be sold, it’s building itself to be big.โ€

    Nov 12, 2019 12:45 PM

    Check out the mining companies nominated for awards at the bottom of the London Mines and Money show going the end of this month.

    Nov 12, 2019 12:48 PM

    Lobo Tiggre – Gold and Silver Will Head Higher and This is Where Iโ€™m Investing My Money

    by @PalisadeRadio on 12 Nov 2019

    “We talked about Gold, what to look for on a mine site visit, and why investors like Ray Dalio are beginning to talk about gold.”

      Nov 13, 2019 13:26 AM

      I think a person has to watch pretty close to see what your talking about EX, alot closer than most people will anyway.
      Yes, there is coin to be made but it takes time and effort, its just not for everybody.

      I think most people want to buy a stock and are happy if it beats the interests of a term deposit or gic etc.

      I have some PM shares I figure are for exactly that, just to beat the interest a bank would pay, I pick silvercorp for that.
      Doing just fine, especially if you kept them from that 60 cent price they were, fine if you bought them at $4 too. lol

      Im actually expecting them to hit higher highs than they did with gold at $1800….eventually.

      There are so many good PM shares to pick from, more than I have coin for.
      Your lists are good, I feel I could throw darts at them and do just fine.

      Assuming gold doesnt drop to $700 that is. ๐Ÿ˜‰

        Nov 13, 2019 13:19 AM

        b – I’d agree that getting an understanding of TA and learning the skills and knowledge to trade takes time and work, as does studying the field of miners for the companies that will have catalysts or upside torque based on their guidance or quarterlies, and it takes work to watch the macro backdrop for when certain sectors have a tailwind or headwind.

        However, doesn’t anything worthwhile take effort and work? My comments aren’t for the lazy or uninterested, but rather folks interested in investing in the resource sector in and in particular the miners.

        It is just a bit rich for anyone to say that the generalist markets had better returns than the silver miners in 2019. Also saying Gold is just doing another fakeout when it is $550 off it’s major bottom is ridiculous and a misguided comment that should be called out.

        It is a huge stretch to miss the breakout move above the 2016 high in Gold, even if they aren’t paying that much attention.

        It didn’t take much effort to buy a few silver stocks in tax loss at the end of 2018 and sell them at the end of the Q1 run; or to buy them during the mid-year slump in May/June and ride them up into Aug/Sept for a nice profit, even if they weren’t that informed.

        I have little compassion for lazy investors or lazy people in general. If investors aren’t going to work at it, then why they heck are they listening to podcasts about the Jr miners anyway?

        If people are that lazy they should just bet on ETFs and call it a day and skip the KER, where Cory does an excellent job of interviewing mining CEOs and industry pundits discussing individual companies or the mining ETFs.

        Maybe they’d prefer a knitting show instead. ๐Ÿ™‚

        And I’d drop a deuce in my knitting if Gold hit $700 so that is very unlikely in the near to medium term, or even 2 years out. I know you are kidding, but there were still folks expecting $500-$700 Gold the last few years, and boy did they miss out on excellent tradable rallies to the upside, that would take multiple years or decades in the general markets.

        Nov 13, 2019 13:28 AM

        BTW – Silvercorp (SVM) is pretty solid mid-tier Silver/Zinc/Lead producer to bet on that you mentioned, and they are the lowest cost Silver producer all-in, so yeah, if you just bought it in late 2015 or early 2016 and held it until present, even that would have been fine. There have been plenty of tradeable rallies in it as well for the more active traders.

        In addition SVM pays a dividend, which is rare with the miners.

        It is unlikely someone would just throw a dart at the list and figure all that out though.

          Nov 13, 2019 13:37 AM

          It isn’t an accident that we were covering here on the KER blog most of the Silver stocks that really outpeformed their peers and most of the miners the last few years like Impact Silver, Alexco, Excellon, SantaCruz Silver, Americas Silver, Silvercorp, First Majestic, Avino, Discovery Metals, etc… and passing on the one-hit wonder drill plays or skipping even positioning in the larger behemoths like Tahoe, Hecla, Silver Standard (now SSR), Fresnillo, etc… because that wasn’t where the action was.

          One exception in the Silver explorers has been Silvercrest, but we discussed it over and over again as an explorer that regularly hit paydirt, because we tracked their news and progress, and discussed their technical set up on the carts.

          There are dozens of other Silver companies that didn’t have nearly as good of moves, or crashed in shareprice down to nothing, and that is what many folks over at and stockhouse bet on because they were throwing darts without putting in effort.

          Just sayin…

    Nov 13, 2019 13:19 AM

    I understand EX, it takes an effort and pretty much anything a person wants to get good at does.
    I was simply saying that most people dont want to put in the effort required.
    Thats pretty normal I think.
    Most people would be better off using a broker or guru etc, most people wouldnt have the time required either.

    It takes alot of dif kinds to make a market.

    Years ago I was saying a person could take the kitco list….buy them all and make big coin….it happened, I was 100% correct. no effort required.

    The same thing is going to happen again, might move slower this time tho.
    The list you made up of silver companies just under the money….good list.

    And ya, silver corp is a good one, which is why I chose it to sit on.
    also, they bought a bunch of their own shares back reducing the number available.
    only issue is its in china…cave ins…leprosy running thru the camp etc
    Basic mining risks.

    Gold is going to do what it always has and anyone that understands that owns it if they can, the only discussion is what %.
    It is kinda funny how so many people really dont realize just how good its been…or will be.
    I dont blame them tho, people have been taught gold is a relic….maybe they’re right.
    i dunno.

      Nov 13, 2019 13:01 AM

      Those are fair comments and good points b.

      In life very few put concentrated effort into different areas of their life (business, relationships, health & wellness, investing/retirement planning, spiritual path, etc..) I think Brian Tracy once said “People more planning into 2 week vacation than they do on the next 5-10 years of their life.”

      Yes I remember you saying you could just buy the Kitco list, but my point at the time was those companies featured on Kitco’s mining lists are the stocks featured in the ETFs GDX, GDXJ, SIL, SGDM, and the HUI Index. If that is all people wanted to do, then they were better off just buying 1-3 ETFs and being done with it.

      The point I’ve been trying to make is that if you “Build your own ETF” and pick the stocks better than just Majors & Mid-tiers, and mix in more of the quality Juniors (smaller producers, developers, explorers, and even the smaler royalty companies) that this will outperform those ETFs…… but it takes time, effort, research.

      Once investors have a good handle on Technical Analysis for entries and exits, and a good grasp of the macro economics backdrop in their sector (in this case Precious Metals) then they can actively manage their weighting and position sizing in each stock in their portfolio and get above-average returns and scalp smaller 20-50% gains from time to time.

      > For example, with (SVM) Silvercorp I bought in 2016, but have traded around that position by adding / trimming every year to maximize gains or buy on dips.
      >> I traded SVM 6 times in 2016, 5 times in 2017, 8 times in 2018, and 6 times in 2019.

      As you mentioned that kind of trading or investing style is definitely not for everybody, and some don’t have the time or knowledge or confidence to do that.

      There isn’t anything wrong with selecting a few companies for a “buy and hold” approach either, and hopefully some of the fundamental news would still help other identify companies they may be interested in to buy during corrective phases.

      I would guess there are a higher number of folks listening, reading, and commenting on the KE Report blog/commentaries that do like stock picking and actively managing their accounts, and those are where my comments are generally focused, but I recognize those topics aren’t for everyone, and I try to keep them on commentaries more focused on the resource sector.

      Ever Upward!

        Nov 13, 2019 13:36 AM

        “The point Iโ€™ve been trying to make is that if you โ€œBuild your own ETFโ€ and pick the stocks better than just Majors & Mid-tiers, and mix in more of the quality Juniors……”

        ABSOLUTELY 100% correct THATS what its all about!!
        And I hear there is some real coin in that too.

        As for trading SVM, I guess I’ve been lazy, I decided just to do a Livermore.

        Im actually a pretty lousy trader. Especially on the way down, I need a stark raving mad bull. ๐Ÿ˜‰

    Nov 13, 2019 13:02 AM

    Jaguar Mining Reports Third Quarter 2019 Financial and Operating Results

      Nov 13, 2019 13:20 AM

      Go JAG! Glad the capital raise allowed them to retire the old debt and that things are ramping up for grade in Q4 (as Q3 they had to deal with some of the low grade stopes to access the higher grades moving forward).

        Nov 13, 2019 13:30 AM

        I really dislike the hedging they’ve engaged in but at least it’s been fairly modest (3,600 ounces of forward sales outstanding as of April). Hopefully management will refrain from further such speculation as the company’s financial condition improves.

          Nov 13, 2019 13:32 AM

          To be clear, I’m not selling due to the hedging and have in fact increased my stake by about 20% after it hit .105 recently.

            Nov 13, 2019 13:27 PM

            I don’t mind some hedging, as I understand why companies do it, but only like to see a percentage of production (not all of it). If Gold runs higher in price then hedging can act as a ceiling, but in down turns it can also act like a floor. It is similar to the longer term offtake contracts that Uranium miners utilize.

            Nov 14, 2019 14:28 AM

            Jag’s hedging took a huge toll on Q3 results. The average realized price of gold was just $1320. That’s probably $170 or more lower than it should have been (just a guess).

            Nov 14, 2019 14:51 PM

            Agreed, but I saw people discussing this over at and someone had mentioned the hedges come off in 2020. Need to verify and dig in to that a bit more, but that should be nice for next year.

    Nov 13, 2019 13:41 AM

    I like Jag, I own a few.