Dave Erfle – Oversold Precious Metals Popped Over The Last Week On The Back Of A Series Of Concerning Systemic Financial Challenges
Dave Erfle, Founder of the Junior Miner Junky, joins us review the turn in sentiment and direction in the general markets and precious metals sector the middle of last week when more systemic financial weakness reared it’s head. We saw silver and the PM mining stocks take off the middle of last week more aggressively than even the moves higher in gold, when The Bank of England pivoted to ease the economic pressures in their markets, a little over a week after Japan just did the same thing. This reversed the trends of the Pound and Yen, pressuring the US Dollar lower, and boosting markets.
Then we saw the news over the weekend regarding Credit Suisse’s weakness and the concerns of a contagion affect in the banking sector. Some market participants came to see this as evidence that there is not much more room central banks have to keep hiking rates before something major breaks and then they’ll need to reliquify markets. Once again, speculators are betting that Fed pivot is becoming increasingly more likely by the beginning of next year.
As for the precious metals sector, it was promising that silver and we look at some technical resistance levels Dave is watching for in GDXJ, gold, and silver, as we head into this week’s close. Dave also highlights a number of clues and tells that we were getting near a bounce at the beginning of last week with so much bearish sentiment, where both the gold to silver ratio and the gold to S&P 500 ratio were at technically, where the BPGDM Gold Miners Bullish Percentage Index was at such a low reading, and the COT positioning in bullishly contrarian set up. Ultimately though, Dave wants to see a move above $52 in Newmont, as a key bellwhether stock, to gauge generalist investors appetite for coming back in the gold stocks.
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Got my eye on it for sure. They gotta bring costs down, which hopefully will happen as production increases.
I had a nice 30% swing trade in Pure Gold from Sept 9th through 12th, where I sold for the profit, but then jumped back in on the 16th, and am back up 24% on it again. Gotta love when gold producers get that completely smashed down to silly valuations. I feel much more confident in the new executive team with Mark O’Dea at the helm…. Success leaves clues… and Mark will get their ship turned around.
In past I was probably the guy buying the stock from the swing trader, after it went up.
Wow, that’s like music to my ears. I followed Doc nibbling LRNTF at 85 cents. Been a long ways down. Recently loaded up at a dime.
It was nice to see gold claw back over $100 in the last week, where it rallied from $1622 up to the close at $1730 this afternoon, to go right up and tag the 50 day moving average. It may roll over from here after such a big move, so we’ll see if the 50 day MA acts as near-term resistance tomorrow.
> Gold Chart: https://schrts.co/igqwFiJV
Just a side not that was hilarious that nobody was on here talking about the PMs gurgling and going down the drain today, or yesterday, or last Friday, or last Wednesday when things took off. Instead people were most vocal last Monday and Tuesday during max pessimism that people should sell, sell, sell, and go to cash. Once again, those are some of the best contrarian buy signal.
As mentioned last Monday and Tuesday, I deployed my dry powder to add to over a half dozen positions, because I saw the BPGDM down to 7%…. then it dropped to 3.5%. It’s not a perfect timing tool, but as pointed out early last week, it sure was not the right time to be selling into lows, and those kinds of readings eventually get reversed by a rally in the mining stocks (as Dave eluded to in the interview above).
Of course the real star of the show over the last week, has been Silver vaulting from below $18 to the low $21s today, and the silver stocks have been on a big rip higher 4 out of the last 5 trading sessions.
You gotta be in it to win it. Got silver stocks? (or just cowering in cash?) 😉
> Silver Chart: https://schrts.co/tzjWTVQi
Regency, Dolly Varden, Vizsla, Apollo, Outcrop.
Yep. Almost across the board the last few trading sessions we’ve seen some really nice moves in the vast majority of the Silver stocks. I posted some lists yesterday of silver stocks in the green and many were up high single-digits to double-digits just on that day alone (not counting the action we saw last Wednesday or Friday, or in today’s trading session).
We’ll see if this move has more legs, but if nothing else, it was technically overdue on the daily and hourly charts and related strength and momentum indicators. There is still a lot of work to do though for breaking more overhead resistance levels, on the weekly and monthly charts for the mining ETFs like GDX, GDXJ, SIL, and SILJ and for Gold and Silver. Still this has been better than a sharp stick in the eye. 🙂
(GSVR) (GSVRF) Guanajuato Silver Production Increases 85% M/M In August
Oct. 04, 2022
“Guanajuato Silver said Tuesday it produced 267.5K oz of silver equivalent (AgEq) in Aug. due to additional production from Topia and San Ignacio mines, up 85% from July, which only included production from El Cubo. Cash costs per AgEq oz continue to decline at El Cubo, with July costs falling to $12.85.”
Silver Could Be the Next Great Bubble, You’ll Want to Hold On: Jeff Clark
The Jay Martin Show – Oct 4, 2022
GO GOLD GO!!!!!!!!! GO SILVER GO!!!!!!!! I just thought I would beat Joe at his own game. LOL! DT
Ha! Good one DT.
I actually trimmed back a few positions into today’s continued strength in the gold and silver miners, expecting a potential reversal tomorrow after so many big up days.
Joe busy covering unforseen shorts
Joe had been clear he is in all cash and was advising everybody to sell everything early last week on Mon/Tue when savvy investors were doing the opposite and deploying cash to buy into that weakness.
So he was a contrarian signal, once again, and missed this tradable rally, just like all the rest of the tradable rallies.
Personally, I was buying beat up PM miners last Monday and Tuesday into that weakness, and conversely was selling some in a few positions today into the strength and follow through up to near-term resistance in Gold and Silver.*
* That’s just what I’ve done personally, so not investment advice, and I’d never presume to advise others what action to take like he keeps doing.
Buzz, Joe wishes. On the day of the low Joe made his outlook quite clear as he showed his lack of understanding yet again.
And down the tubes they go again, glug, glug, glug.
PMs are getting murdered by the strength of the dollar among other forces BEYOND YOUR CONTROL!!!
The only control you have is to SELL, SELL, SELL!!!!
These PM miners are going into the dump, many of these companies will go BANKRUPT soon.
They will be snapped up for PENNIES on the dollar, if they are lucky.
There isn’t much time left, you don’t sell soon you will be selling for much lower prices in November and December.
But hey, don’t listen to me, I’ve only been right, telling you the same thing over and over again, for months now.
Sold SilverX(AGX) and Santacruz(SCZ) for small profits recently. Don’t like what’s happening with Lula in Brazil and that whole continent.
Firefox(FFOX) was down 20% yesterday so surfed over to Helsinki, have a look around. Seems Finland is a much better place for miners and worth more consideration.
Then saw that I-80 just reported more encouraging drill results. So it’s probably better to stay closer to home..Nevada is a very good place for miners.
I like and own both Santacruz Silver and Eloro Resources, one is a silver producer, the other is sitting on a World Class Silver, Zinc, Lead, and tin deposit. Eloro Resources deposit will be an open pit mine in Bolivia. The systems in South America and particularly in Bolivia are extremely huge, Eloro is right up at the top of these systems. Santacruz now has most of it’s operations in Bolivia, I feel fairly confident that Bolivia is a safe and mining friendly country. DT
Eloro has been coming out with one huge drill hit after another, for the last two years. This latest drill result just came out this morning. None of their intersections were duds. Awesome! DT
Good thread here guys. Out of that list I still own Santacruz Silver (SCZ) but harvested gains from it earlier in the year and am just holding the core position at present which is still well in the money from where I acquired it.
As for I-80 Gold Corp (IAUX) it is one I’ve been building a larger position in and like almost everything about them…. not just Nevada, but they are going do double production each year for the next 4 years, they have one of 4 processing centers that can treat refractory & transition ore, they have a flotation circuit not yet utilized, and a heap leach operation; and in addition to that they are killing in with bonanza exploration results. What’s not to like?
Good Gold run. There should be more. The Dollar is popping some right now before heading lower, possibly to consolidate at the 109 Gap area.
Stan Harley is a top shelf long term market timer. He called the market rally this week. His ‘years in the making’ market low call is for late December, as divulged on Larry Pesavento’s Monday show: https://www.youtube.com/watch?v=ITGEYK8HQHg
Wti is going to consolidate for quite sometime and then head lower. I have targets as low as 45-52 heading into next year. Since I expect miners to outperform the metal this would make sense for the miners and there profit margins. After that I do see wti heading higher and making new highs.
When I get a chance I will post the chart.
I would not be hoping for new lows in the miners after this current pop in the metals. A correction yes but but the dip mentality is here!
To each there own
OPEC talking about cutting back daily production. Could make a difference in price. The question I would have is that I don’t think they would cut production because they are nice. It could be possible they are attempting to drive prices back up in view of world-wide inflation and/or they have arrived at peak production in some of the members countries.
Opec have said they are cutting back production of one million BPD, if Russia keeps getting challenged by NATO aggression, they could stop exporting all their oil production to the west and take 6 million barrels per day offline. The price of oil will climb much higher much faster.
President Biden will wish he hadn’t cancelled The XL pipeline which would have been coming online about now. DT
Good points DT. Sounds like the price of oil is going to be driven by politics, as usual.
Thanks Glenfidish, the oil trade was wild.
Sitting back waiting for oil to come down.
In miners now.
A very smart move imo.. There is no rush here with wti and oil plays. Being patient here is prudent after the run it had. Everyone is currently super bullish including media and what fed may do. It’s all smoke. Like I stated the charts are signalling side ways and one more big drop. I just tell the cycle and movement. Why and for what reason i leave it to the experts in here who can bubble there ego so hard lol!
Another way they affect opening price on miners is being shown today.
They have not reported any activity in more than one-third of my miners. May just be Schwab, but if you pick and chose what to post, you can affect the overall price and thereby direction, which everyone knows is illegal if there were Regulators and Congress.
Looks like we are back to the alternating day scenario. Todays biggest losers were yesterdays biggest winners ie.: Emerita, Stillwater Critical, Vizsla, Africa Oil (My account). However, it is still early today and in the week. I will be looking for sales later today after I go buy some dog food. I don’t know what made me think of dog food while looking at the miners performance. Back in awhile.
Added to Nine Mile, Africa Oil and Stillwater. Not a lot but some.
(PGM) (LRTNF) Pure Gold Mining – Pouring Gold Every Week – Mark O’Dea
6 Minute CEO – 10/3/2022
“Pouring gold every week and a market cap of less than $100 Million Dollars. Fully built operating mine in Canada. Pure Gold Mining has adapted to the real-world startup mine challenges swiftly and adeptly. Don’t under estimate this team.