Dave Erfle – Macroeconomic And Technical Factors Driving The Precious Metals Sector
Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us to review both the technical and macroeconomic drivers affecting the precious metals sector, and related mining stocks. We start off outlining key technical levels to watch and the monthly close in gold above $1835 being on solid footing. However, there are also concerns that lower prices may be in store in gold and silver if we see any further turbulence in the general markets, coinciding with the next round of Fed rate hikes. With so much uncertainty in the markets, Dave is comfortable keeping a healthy cash position in place for now to have buying power to take advantage of further pullbacks. We also discuss some of the technical support levels in the mining stocks via GDX, and GDXJ that could come into play in a capitulation event.
We wrap up with a discussion on the big M&A news out today with Gold Fields (GFI) announcing it is going to acquire Yamana Gold (YRI) (AUY), with yet another big merger between two of the gold majors. Dave points out that the prior acquisition of Kirkland Lake (KL) by Agnico Eagle (AEM) noted a short-term bottom in the miners, as did the 2018 acquisition of Randgold (RRS.L) by Barrick (GOLD) (ABX). This transaction could be indicative of more mergers and acquisitions to come and a sector bottom coming in the near-term.