Dave Erfle – Technical And Macro Outlook On US Equity Markets, Gold, GDX, GDXJ And Junior Mining Stocks
Dave Erfle, Founder of the Junior Miner Junky, joins us to outline the downward selling pressure in most markets here at the end of the week, and his technical outlook on the general markets and precious metals. With a retreat below recent support in the S&P 500, there is a real concern of a further selloff in US equities next week, and even a “Black Monday” type of scenario can’t be ruled out. This selling pressure is validation that the Fed continuing to hike rates to fight inflation is working on bringing down the demand side of the equation and was telegraphed to the markets at Powell’s speech at Jackson Hole.
As for the precious metals sector, we look at some technical support levels Dave is watching for in gold, GDX, and GDXJ as we head into next weeks monthly and quarterly close. While there is the setup for a further flash crash down in the PM sector, he doesn’t expect it to be a long protracted correction, and points out the 7 year cycles where gold has bottomed in 2001, 20008, 2015, and that we are due for one again here in 2022.
We review the current environment in the junior mining stocks, where the focus should be on companies that have quality management teams and 12 months of operating capital in the bank to continue work programs. Wrapping up, we discuss whether these low valuations in so many junior companies made encourage larger producers to acquire some of the smaller market cap companies, and Dave mentions that we may see more companies merge to strengthen their balance sheets, synergies, and value proposition.