Dave Erfle – Positive Technicals And Fundamentals As Gold, Silver, And Mining Stocks Continue Surging Higher
Dave Erfle, Founder of The Junior Miner Junky, joins us to review the recent strength in gold, silver and the mining stocks, and the positive signals setting up in the precious metals sector. We start off by reviewing the bullish technicals we’ve seen lately with the monthly close in February being over the $1900 level, and strong follow through today in gold, accompanied by moves higher in the ETFS and the larger producers and royalty companies. Dave would like to see a monthly/quarterly close above $1975 to really get some more serious momentum building in the sector.
The junior miners have not moved as much as the seniors at this point, but we discuss how this is the case at most major turns higher in the PMs and that it is typically the larger companies that can monetize higher metals prices first that get the bid from generalist and momentum investors as they rotate into the sector and then it eventually trickles down to the juniors where they catch up and start to outperform. Dave is watching a move above $47 in (GDXJ) to really get more interest and capital flowing into the Junior miners.
We then discuss if this continued move higher is simply due to the recent geopolitical narratives, but Dave unpacks a number of macroeconomic drivers that have also been underpinning the move higher in the gold with the Fed rate hikes right around the corner, to fight inflation market pressures that have only been rising for the better part of a year, as well as continued weakness in the general US equities. One other bullish factor for the sector has been silver piercing up and closing above the $25 level today, the outperformance of the silver ETFs (SIL) and (SILJ) over the gold ETFs of (GDX) and (GDXJ), many silver producers up double-digits or high single digits percentages today, the strength of Wheaton Precious Metals (WPM), and the improving picture on the gold:silver ratio.