Dave Erfle – Is There Any More Juice To The Upside In The Precious Metals Sector?

Dave Erfle, Founder of the Junior Miner Junky, joins us to provide his technical and macro outlook on the short-covering rally that we’ve seen in the markets the last few weeks, and what support and resistance levels he is watching to see clear in gold, and the mining stocks in GDX and GDXJ.  The move higher in the markets and commodities was further underpinned by the US dollar rolling over from its highs over 109 and with interest rates pulling back down some, so we discuss what would cause a more prolonged move higher or lower in the greenback.  


There is still some trepidation and selling in the mining stocks though, and lower volumes, so there doesn’t seem to be much energy to this latest move higher. Dave again highlighted the inflationary forces that hit the largest gold producer and bellwether stock, Newmont Mining, after a very rough quarterly operations report.  He also pointed out how it is a big component in the ETFs, so it will be important to see it turn higher for generalist money flows to come back into the sector. We wrap up discussing the dichotomy between the overall valuations in the mid-tier and large-cap producers and royalties companies, versus the extremely low valuations seen in the junior mining stocks; which is where Dave feels the edge is currently for investors that are accumulating them.



Click here to learn more about the Junior Miner Junky newsletter.

    Aug 09, 2022 09:21 PM

    Silver and the silver and gold juniors are where we’re seeing the best action for a change but it looks like they will soon allow gold and the senior miners to do some catching up.
    New lows are extremely unlikely for any part of the sector now or later.
    SILJ completely filled yesterday’s gap before climbing 1.8% off of today’s low while most other g-s ETFs weren’t quite able to completely fill their own gaps.

      Aug 09, 2022 09:52 PM

      Yeah, I’ve noticed many of my silver positions have been rather peppy the last few weeks, and rightly so as Silver rebounded from $18 to over $20 in a small silver squeeze, and the translated over to some pops in oversold silver mining stocks as well.

        Aug 09, 2022 09:56 PM

        What we’re seeing is far more significant than “pops” but I can see why many are skeptical.

          Aug 09, 2022 09:30 PM

          It would be very encouraging if these moves had some legs to them and broke more key levels of overhead resistance for sure. The reason I used the word “pops” is that so far, until more data comes in showing these legs higher can be extended, then they appear to just be relief rallies after significant corrections.

          It’s possible that area where the miners were so oversold, and where Gold retested that $1675ish area for the 4th time (down to $1678) and where Silver got down to $18.01 was the intermediate bottom we were looking for, so I’m optimistic it was a turn, and will be looking to see if the PM sector can keep clawing it’s way higher despite the disbelief most do have.

          Personally, my stance was to go pretty much “all-in” on my precious metals positions the first and second week of July, and had mentioned I was back to 99% deployed at that point because things just seemed so bombed out on a sentiment and breadth basis. The BPGDM was flashing a 10 for breadth by the 2nd week of July, and you had posted that chart were 0 companies were above their 200 day moving averages, so it seemed like a good spot to get more aggressive and deploy my remaining dry powder.

          Now in the 2nd week off August I’ve trimmed back a few positions that ran up double-digits the last 3 weeks, and am back up to 6% funds available (94% invested in PMs), and am about 90% invested in my uranium positions. I’m still not fully deployed in battery metals though, and would like to some more copper, nickel, palladium/platinum positions if we see a more extended move higher in the PM stocks, where I can trim off a few more profits.

          Overall though, most of the PM positions I have are now positions trades in place for the next 3-12 months. My portfolio is the most weighted to gold and silver miners that is has been in about 6 years, as I feel the preponderance of evidence is that they have the furthest to run higher over the next year or two. If we do get the move back down lower over the next few months in a big stock market collapse that pressures all sectors, then I’d deploy my remaining funds in a few more PM miners that I sold earlier in the year that are now past their 30 day wash periods.

            Aug 09, 2022 09:25 PM

            Yes I know why you called them pops which is why I asserted that they are doing much better than you think. Many “key” things have already happened.

    Aug 09, 2022 09:49 PM

    G & especally S…. are going to move so fast , that they will catch most off guard … IMO. Be ready to strike like a viper.

    Aug 10, 2022 10:54 AM

    I don’t know what people don’t understand about The Federal Reserve, they have done the same thing that happened in the 1920’s they juiced the system, which caused huge disparities between the rich and the poor. The Stock Market went crazy because all the speculative money created in the 20’s flowed into it. The Federal Reserve became trapped and couldn’t solve the speculation because the credit situation was way overblown and this culminated in a mega crash in 1929. What we are now seeing is much worse and on a bigger scale. The Federal Reserve is again trapped. These markets are going to crash, this time won’t be any different it will be worldwide. Simple to see, if you are a student of history. DT

      Aug 10, 2022 10:22 AM

      After Labor Day on September the 5th I will be deciding how much longer I can stay in this market, that is only 31/2 weeks away. Sometimes I think I should change my name to “Roger Babson”. DT

    Aug 10, 2022 10:57 AM

    Nothing new. Alternating day algos.

      Aug 10, 2022 10:03 AM

      yes nothing new, ongoing claims by angry old men of the collapse of the financial universe and civilization remains on hold. As is the supposed and exalted rise in gold which has yet to eclipse its former floor around 1800+ and now serving as resistance. Gold sector equities remain in their deep hole.

        Aug 10, 2022 10:18 AM

        Speaking of angry old men, I added a few Vizsla Silver and Midnight Sun. Midnight Sun keeps showing some interest but I don’t see any news. Crescat supposedly covered it but the version of Crescat youtube I had was a discussion of some other company. MIF talked about it some in June, but that was June. Picked up some more anyway as I like their location in Zambia among some other good projects. Who knows…

        Aug 10, 2022 10:21 AM

        Yes jonsyl, nothing new here, you are just a stupid uninformed fool that posts here to complain and butt heads with all the other posters, and you have nothing to add but the mainstream dribble. DT😉

          Aug 10, 2022 10:46 AM

          No complaints here DT. Actually in agreement with other posters than make sense, and don’t live in a world that informs me of what not to do. That’s all. This site is excellent for that.

            Aug 10, 2022 10:53 AM

            Wrong again jonsyl, all you do is complain. DT

        Aug 10, 2022 10:08 AM

        The only ones in a deep hole with equities are those who bought the top Jonsyl ….sorry if you’re one of them. Try buying bottoms and selling some into the rallies next time. My free warrants from orezone that I bought at .07 are trading at .80…..even with copper my free kodiak shares that I bought at .45 are still in the money. Yes I’m down 30-40% on 2-3 of them but can’t win them all and those are coming back nicely too. Brixton Kootenay and impact. My fault on those for being too greedy and breaking my own rules.

          Aug 10, 2022 10:13 AM

          There is some truth in what you say but it is also a semantic argument. For example, one could buy the bottom and go up 1000%, then have it walked back. Some would say they have no loss if it retreats 90%. Others would say they have a 90% loss. Then the issue is not buying the top, but not selling the top. Still a big drop either way. Too greedy may not be the issue.

          Aug 10, 2022 10:32 AM

          I sent a reply that is wandering around somewhere. I guess it went to the “needs fixing” pile.

          Aug 10, 2022 10:22 AM

          No need to feel sorry wolfster, as clearly posted here in past, very clear with my entries AND exits. After being out early april, bought it mid may and mid june, far from the top. Yet as I stated before, with gold basically where I purchased my assortment of dregs, still down on my 25% by about half with this pop up. The same old underperformance.
          Unlike the bagholders that claim they bought for the long haul, LOL, and keep accumulating successive lows for more than a year, claiming each to be the next launchpad.
          Still a bagholder but with plenty cash to leverage up once sector equities show some relative life.

            Aug 10, 2022 10:03 PM

            Yup. Can’t expect much if you bought the dregs of the sector. 😒

          Aug 10, 2022 10:52 AM

          Wolfster, you might want to check out this latest post by Bob Hoye on the History of Gold (Market) Rushes, you were talking about this subject recently in a post. DT

    Aug 10, 2022 10:20 AM

    Dollar down $1.40, inflation down .4 which suggest lower rate hike as markets are soaring, why is gold not reacting should be in the $1840’s territory

      Aug 10, 2022 10:15 AM

      I agree, Gold is getting Pooched. LOL! DT

    Aug 10, 2022 10:24 AM

    As evidence that Matthew has some good charts, Emerita just did a bounce….

        Aug 10, 2022 10:05 AM

        No. I am referring to his sector type info that he puts out on a routine basis.

        Emotf is highly manipulated and particularly since March when managed money got caught in a short squeeze of 40-50% price increase. The market got it all back in 2 days, but they haven’t let up in pay back not counting the general down trend of the algos. Just my opinion as no way to prove criminal acts as a retail investor except personal observations.

      Aug 10, 2022 10:17 AM

      It will finish the week above its 200 week EMA with a close at 1.12 and the fork support-turned-resistance is about 20 cents higher. There’s no reason it “must” go lower based on the chart but of course it could. It is a positive that volume fell off as price went lower.

        Aug 10, 2022 10:28 AM

        Thanks for the EMO chart. I hate to ask on personal stocks, so thanks. Emo can trade funny. There is a trend in it of trading a lot at close. Some is just painting the tape to control direction, but when it gets in an uptrend the last couple of minutes before 4:00 PM NY time can be entertaining and get some big finish type results. When it is on a roll, the Emo people refer to the last hour of trading as the Gower Power Hour (Gower being the CEO). Recently (like for months), the last few minutes set the downward tone ending the day. We will see if today has some remnants of The Gower Power Hour or just a bounce.

    Aug 10, 2022 10:59 AM

    After falling 77% in 7 months it’s no wonder NFLX:GLD continues to rise. It’s up 51% since double bottoming at an old fork:

    Aug 10, 2022 10:05 PM

    36 stocks gone negative without Emotf. Just another day again.

    Aug 10, 2022 10:12 PM

    Brixton bottomed versus SILJ over a year ago and has made higher lows and higher highs since while providing plenty of trading opportunities.

    Aug 10, 2022 10:26 PM

    I have a feeling IPT will make it through current resistance soon but it could form a right shoulder instead. Either way is fine.

    Aug 10, 2022 10:28 PM

    Not sure if anyone follows Plunger but this is a good read.

    Aug 10, 2022 10:41 PM

    Do we have a head and shoulders top in QQQ vs SILJ? Probably.

    Aug 10, 2022 10:20 PM

    SILJ closed at a Fibonacci fan resistance that was support last October and January but the week’s not over…

    Aug 10, 2022 10:22 PM
    Aug 11, 2022 11:51 AM

    Love Erfle’s interviews. The best. Keep ’em comin. Longtime subscriber too.