A close look into the gold pullback and where the stocks stand currently

March 3, 2021

Dave Erfle, Founder of The Junior Miner Junky kicks off today’s editorials with a close look at the gold market. We analyze the pullback in gold in the big picture sense and drive down to the stocks, all of which have faded.

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

    Mar 03, 2021 03:39 AM

    Galleon Gold – 38,000 Meters Completed and the Drills Keep Turning
    Results include multiple intercepts ranging from 5 g/t Au to 27 g/t Au

      Mar 03, 2021 03:23 AM

      Buying more Matthew ????…..or are you fully loaded already???

        Mar 03, 2021 03:35 AM

        Yes and yes. I bought more today and probably am not finished. Now have over 1.5M shares.

    Mar 03, 2021 03:39 AM

    Need some input / collaboration on this. I was looking at probability distributions of future outcomes of the economy. What are the scenarios? Probabilities of each scenario? How to play each scenario so we have a plan for each scenario to not get blindsided. Mostly thinking out loud. I know there is a lot of talent on the boards. I update as I think / work through this.

    Idea of Probability Distributions:

    1. Central value around which we think events are likely to cluster
    a. Mean (the outcome that on average is expected to occur)
    b. Median (the outcome with half the possibilities above and half below)
    c. Mode (the single most likely outcome)

    We need a distribution that describes all of the possibilities.

    Scenarios #1: Deflationary Hard Fall
    Ways to play: Have dry powder for opportunities / trim back big winners. If general equities fall by 2/3 having 16.67% cash at the bottom can make up the losses in mining shares? 250,000 drops to 82,500. Invest 50,000 grows to 150,0000 as a 3 bagger to make up most of the difference?

    Scenario #2 Deflationary Down, Fed quick intervene, Up, and Down, and so on
    Ways to play: Buy any dips in miners, commodities.

    Scenario #3 Hyperinflation
    Ways to play: Holding bare bones cash and cash equivalent.

    Scenario #4 Stagflation
    Ways to play: Precious Metals, Agriculture, Commodities, Energy

      Mar 03, 2021 03:06 AM

      Projections tend to cluster around historic norms and call for only small changes.… (seems logical of course) The point is, people usually expect the future to be like the past and underestimate the potential for change.

      We hear a lot about “worst case” projections, but they often turn out not to be negative enough.

      (what do you think is the main projection / thesis as of now)

      There is a story of a gambler who lost regularly. One day he heard about a race with only one horse in it, so he bet the rent money. Halfway around the track, the horse jumped over the fence and ran away. Invariable things can get worse than people expect. Maybe “worst case” means “the worse we’ve seen in the past.” But that doesn’t mean things cannot get worse in the future.

      (I feel like this is a story that is this very relevant at this point in time)

        Mar 03, 2021 03:33 AM

        Could be……….With sick people running the show……one would expect some real sick events to happen….. 🙂

          Mar 03, 2021 03:11 PM

          They should have worn a mask…

      Mar 03, 2021 03:47 PM

      Great post GrowingTrees. Those are some interesting scenarios to consider and it’s a tough call. The FED is trying to inflate their way out of the deflationary spiral the economy was stuck in, and with all the new money creation, and the velocity of money finally increasing from all the government stimulus going directly to businesses and citizens this time and should be ultimately inflationary. What is happening now is unlike the prior QE efforts from the last decade, after the Great Financial Crisis, as that money mostly was mopped up by banks and insurance companies to fix their toxic books and then used to speculate in the markets with. As a result, the velocity of money didn’t really increase, and the only inflation seen was in the general markets getting juiced. This time we’ll see inflation start to perk up, but the economy is much weaker than the markets are projecting, and we haven’t seen the end of the damage done to the economy after a year of lockdowns, small business shutdowns or closures, torching 50+ US downtowns all last summer, supply chain interruptions, and the weak travel & tourism industries with many borders still closed. Based on the inflation paired with expected challenges to the economic picture not being as rosy as expected, the “Stagflation” scenario #4 seems more likely in the medium term, and then Inflation in the longer term, although hyperinflation may be too strong of a term, as the central banks will intervene before it gets to that point.

        Mar 03, 2021 03:56 PM

        I agree with everything you said. Hopefully the future can “play” out with reason of our projections. Hard to find value in this market besides if you were already invested in commodities. Not that we have moved a lot but I much rather have my entry price then getting in now.

          Mar 03, 2021 03:54 PM

          Well the good news on that front is that we may still see some lower commodities prices for a while, and that will give everyone a chance to acquire whatever positions they still want to get in place for the longer term bull market.

    Mar 03, 2021 03:49 AM
    Mar 03, 2021 03:06 AM

    My thoughts are gold can continue down as long as bonds do. There’s a good correlation between bonds and gold since last August, when they both topped. Of course, bonds are weak because of real interest rates climbing somewhat. Perhaps not good for short term traders but long term, I agree with Jordan and David. I think we’re roughly speaking, at a bottom on gold. JMO

    Mar 03, 2021 03:48 AM

    Don Durrett is a superb listen. His thoughts on royalty companies is unique and potentially telling if PMs really move up.

      Mar 03, 2021 03:48 PM

      Thanks for that post SilverDollar, as I always like to get Don D’s perspectives on things.

    Mar 03, 2021 03:01 AM

    long X

    Mar 03, 2021 03:44 AM

    Group Ten Metals came out with exceptional drill results but they were released on a very dreary day for the metals! DT

      Mar 03, 2021 03:49 PM

      Agreed DT. Good news release from PGE, but not a great day to release them.

        Mar 03, 2021 03:12 PM

        Added a few.

          Mar 03, 2021 03:36 PM

          I’m well stocked up on Group Ten, as my largest Platinum/Palladium/Rhodium/Nickel, but also considered adding more today. It’s interesting that the market didn’t really react to such good news today.

    Mar 03, 2021 03:58 AM

    long MAC