Dave Erfle – Will We See A Waterfall Capitulation After The June Rate Hike?
Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us to focus on the recent moves in general equities and the precious metals. While most general equities sectors and indexes are in bear market territory year to date, gold has held up much better overall, being essentially flat on the year. We discuss the more recent bounce in equities, bonds, and the metals from oversold conditions, in tandem with the US dollar rolling over some; but Dave’s concern is that after the bounce, we still may see a waterfall decline in a larger capitulation move.
In that kind of a liquidity event, everything will get sold off, including the PMs, so that is why he is more comfortable keeping a healthy cash position in place for now. All eyes will be on Fed policy and messaging, and what happens after the next 50 basis point hike if they still indicate staying on track to keep tightening. We discuss some of the technical levels in gold, silver, GDX, and GDXJ that he’d like to see hold this week, and then moving into the monthly close next week.