Weekend Show – Axel Merk and Doc – A Look Into 2023 For PMs, US Markets, Inflation and Commodities
Welcome to this Weekend Edition of the KE Report. We spend time with Axel Merk and Richard Postma. The focus is on next year’s outlook for metals and markets. We consider where inflation will be, what the Fed is going to do and if a recession is truly coming.
Please keep in touch with Shad and I by emailing us your thoughts on the markets as well as the guests and companies you would like to see on the show. Our emails are Fleck@kereport.com and Shad@kereport.com.
- Segment 1 and 2 – Axel Merk, President and CIO of Merk Investments joins us to share his outlook for 2023. We start by recapping the market pullback this year and how that needs to play into outlooks for next year. We then move to Fed policy as tied to inflation, interest rates throughout the year and the impact on metals and markets. Overall we are now in a very different environment for investors.
- Segment 3 and 4 – Richard Postma, AKA Doc, provides his monthly recap of the precious metals markets and what he is expecting for the long term trend. We also look at the gold and silver stocks, both majors and juniors.
Exclusive Company Interviews This Week
- Troilus Gold – Strengthening Balance Sheet Through A $50 Million Transaction With Sayona Mining, And High-Grade Drill Hits From The Connector Zone
- CO2 Lock Corp – 2023 Plans Including Testing and Possible New Project Acquisitions
- Snowline Gold – Step Out Drill Results From The Valley Zone Intersecting 1.45 g/t Gold Over 285.2 m, Including 2.48 g/t Gold Over 128.2 m From Bedrock Surface
- Aurion Resources – Exploration Update From The Helmi JV With B2Gold And From the Risti Property Targets
- InPlay Oil – Comprehensive Update On Oil Production Growth, Reserve Growth, Debt Repayment, New Dividend Policy, and Share Buybacks
- American Copper Development – A New Company Focused On The Newly Consolidated Lordsburg Project, A Well Known Management Team And Money In The Bank
- Wallbridge Mining – 2022 Exploration Recap at Fenelon and Martinière, Along With A Spinout Of Nickel Assets Into Archer Exploration
- Allied Copper – More Information On The Volt Lithium Acquisition
- SilverCrest Metals – Debt Package Refinanced, More Financial Freedom, Possible GDX Inclusion And the Shift In Shareholders
- Blackwolf Copper and Gold – Permit Received For The Hyder Properties, Drill Plan For Next Year, Niblack Property Resource Update Coming
- Petrus Resources – 2023 Will Be A Big Year Of Production Growth And Increasing Free Cash Flows
- Fireweed Metals – Lundin Family Leading A $35 Million Financing, Initial Results At Boundary West The Best Ever On The Project
- Torq Resources – Drill Results Expand The Falla 13 Discovery To 800 Meters, At The Margarita Project
Could I suggest an interview with NFG. Drilling results continue to be spectacular. Eric & Doc, you are also spectacular.
An option would be QH of Crescat and talk about several good miners at the same time, including NFG.
That may be a more likely scenario Lakedweller2. Good suggestion.
Thanks to all the KE Report guest contributors for another great week of daily editorials, company interviews with management, and another solid weekend show with Axel & Doc Postma.
Also thanks to all the listeners of the podcast and radio show, and those members of the KER crew that post and participate here on the blog, sharing insights with our community. Ever Upward!
I gave the “all clear” many weeks ago and said that bulls are in control but few realize it and even now there’s great apprehension among most investors both retail and “professional.” I love it. I saw top-callers on several sites last weekend and more following Monday’s weakness yet we got exactly what I expected which was more upside.
Last weekend I said: The miners will likely light up just as Silver:Gold breaks through current resistance (and they have):
I know you are right, but I have not gotten out of my range bound existence.. But, it reversed before bottoming this time. It could break out in a day, but my alternating pattern has not stopped. So maybe a week or two if they persist.
Our individual stock picks can always move differently than the sector as a whole which is why most of my holdings have nothing to do with my analysis of the sector. When I post charts on a junior it’s to show only what that specific company is doing. XAU, HUI, the ETFs and the metals are a different story.
There’s still some technical and seasonal housekeeping to be done so you might have much better luck in January when everything really gets moving.
Good point Matthew and I am counting on better performance near term.
Last week when silver was 21.43 I said: Silver is up 20% since August’s final close while gold is up just over 1%. It’s up for 5 of the last 6 weeks and now looks ready to add further significant gains. Any scary pullback will probably have to start from a much higher level (at least $2 higher?)…
This week it went up $2.05 and finished at resistance. It could now pull back but probably not much nor for long before going higher.
Good thoughts on Silver Matthew. Yes, it was quite significant when Silver rallied off the September low to eventually reclaim that $21.41 level of resistance (prior support) last month, even while Gold had still gone down to make a new low on Nov 4th down to $1618.
Many of the folks we interviewed were still quite resistant to be encouraged by this outperformance of Silver when I asked them about this, even though it was solid progress, but a few folks like Jordan and Dave Erfle were pretty encouraged by it. Really that first short squeeze we saw, on larger volume, from the low in September at $17.40 to the mid $19’s initially was a big signal that we’d seen beartrap in Silver, and those shorts got served a powerful lesson. When we then saw a $20 handle, and then the key level of $21.41 was eclipsed both intraday at first and then on a closing basis, that was another big tell. However, even when I’d bounce that idea off our guests and other technicians in our pre-call chats, many shrugged it off a bit and said basically “It’s good, yeah, but really until Silver definitely clears $22 then it’s just going to correct right back down again.”
Well, Silver did get above $22 earlier in November, and then did retreat, and many were quick to say that the move higher in Silver had run out of steam and saw the reversal as proof Silver wasn’t ready to break and hold $22 anytime soon.
Fast-forward to last week, and Silver not only vaulted back above $22, but also $23 on both a few daily candles and to end the week at $23.25.
For those that were doubting the initial trek higher in Silver back in September, and then the blast above $21 in October, hopefully they saw the light in November when it broke $22 on 2 different runs, and then kicked off December above $23 with a further squeezing of the shorts in a quick impulse move higher.
Now, it has become a little bit overbought on the short-term basis on RSI, and Slow Stochastics, but the ADX still looks like solid bullish action on the daily charts. It would be normal to see Silver cool it’s jets for a little bit and consolidate some of this recent move, but overall the last 3 months have been very encouraging not just for Silver, but for the whole precious metals complex.
Hi Matthew, I was hoping my Santacruz would go much higher, but it wasn’t to be, it got caught up in tax loss selling and nervous selling, even still it finished Friday in the green. Although The Q3 financials weren’t great due to growing pains, I hope the tax loss sellers get their comeuppance because I believe this stock wants to go higher in the near term. We shall see, Mr. Market looks good to me for the silver stocks. Those tax loss sellers really make me mad. LOL! DT😉
Hi DT. I actually liquidated 6 of my best performing positions on Friday (Santacruz included) because I had plenty of tax losses to offset the gains in the half dozen I just sold. It seemed wise to take advantage of those losses and book some gains now that will be washed out, before the calendar year rolled over.
That does open me up to potentially missing any further gains over the next 30 days in those particular stocks, but I plan on buying them back the first week of January (or thereafter depending on their price action after Jan 3rd…).
Also, as noted above, after such an epic move higher in PM sector recently, then some of the buying may get exhausted moving into the next few weeks. As a result, I’m willing to take the gamble on missing gains in those handful of stocks, to have the cash on hand to redeploy if we see weakness in the sector, and again, I can always buy them back in early January. If the sector keeps ripping higher I’ve got plenty of long-side exposure to the gold and silver stocks.
As a further hedge I decided to throw on a JDST position on Friday too, just in case we see things roll over during the course of Dec or early Jan. This is just a swing-trade for me, and if it pops higher during any weakness, then I’ll harvest the gains and move those funds back over to the dry powder heap. So, now that I did a little hedging in my portfolio after a really good run recently, it would be just my luck that things just keep ripping higher and higher… haha!
When you sell Santacruz Silver you aren’t being a trader you are a traitor! LOL! DT😊
Haha! I know DT, it feels a bit wrong, but I’ve traded around my core position in Santacruz for years and I took the first bigger harvest in 2020 when it outperformed all of the other Silver producers due to it’s margins improving the most #BestOfTheWorst.
Then I added to the position again earlier in the following year but took a big chunk back off when it just ripped higher in 2021 in contrast to most other PM stocks due to the Glencore transaction. I felt underexposed again so I added more to the pile earlier during tax loss selling season last year in 2021 and a little bit more earlier this year, but now I’ve completely sold out of my position in Santacruz for the first time in many years. 🙁
It’s only for about a month though, just during the wash period, and it’s been one of my best performing silver positions post-pandemic crash. It just seemed unwise not to use my other tax losses to wash out the gains I had sitting in Santacruz and a handful of other of my favorite positions that had really outperformed most of the pack.
I still really like the prospects for SCZ, and still don’t think the market has them properly valued for all the mines, production growth profile, and development/exploration upside, but I’m not expecting them to triple in the next 30 days or anything.
In a way… I’m hoping they keep grinding down a bit lower in the interim so I can get back in with a lower cost level than where I just sold. (maybe that makes me a traitor though in the short-term…) haha! 😉
Hi Ex, I got over it, last night after I had a few beers, all is right with the world once again. Cheers Amigo! DT
Santacruz Silver (SCZ) has been a thing of beauty the last few years, and it is in a relatively neutral position at present, having hung onto most of the gains it’s made post-pandemic (unlike most of the stocks in the PM sector). I’d like to see it pull back down to the 144 day EMA by early Jan where I can get repositioned. Fingers crossed!
Nicely done DT! I’ve only had a few beers in the last few months, as I’ve been on health kick, mixing up health juices and going to sweat them out in a dry sauna and hot tub several times a week. After such a nice end to last week in the markets though, I may break out a few hazy IPAs later this evening. Cheers!
Hi Ex, Most people don’t know that IPA stands for India Pale Ale, it used to be a favorite beer when I grew up. We used to call IPA drinkers “Our Pale Ale”. Just a little ditty from the past. I’ll bet you didn’t know that one! DT
Hi DT. Yes, I knew IPA stood for India Pale Ale, but didn’t know you used to call folks who drank them “Our Pale Ale.” Thanks for sharing that little ditty.
Hi DT, I do not own or follow Santacruz but it looks fine to me. It has shown good strength relative to the sector in general and has been making higher lows since December of last year(!).
Don’t forget that bad news appears at major lows just as good news appears at major highs. Markets top when there’s nothing but good times ahead for as far as the eye can see and it makes perfect sense that they bottom when the opposite is true.
Technically it looks like it’s been building a big bullish base for the last two years. Impact Silver easily has the “safer” balance sheet but since I am confidently bullish silver I think holding/accumulating SCZ makes sense. Silver is going higher than most expect and it will happen sooner than most bulls expect. SCZ is very likely to fly MUCH higher as its technical picture implies.
Hi Matthew, I’m glad I’m on the same page as you, thanks! DT🤞
Also last week:
The dollar remains a strong sell especially if it goes above 109 from here. (I doubt that it will but it wouldn’t be shocking if it does.)
Again, last week:
HUI looks great and shows no credible technical “need” for another pullback now (Friday’s wimpy performance probably isn’t credible in light of the holiday).
In a way, I’d like to see the US Dollar bounce back up to that 109 area, and form a right shoulder on a traditional head & shoulders pattern, and then after that… down it goes….
Impact Silver(IPT) needs to spread its wings and really fly now.
Some rebalancing often makes sense but I don’t agree with raising a lot of cash or significant hedging at this time. Along with many other bullish developments, GDX, GDXJ, GOEX, GOAU, SIL, SILJ, HUI and XAU all finished the week bullishly above their respective weekly Bollinger Bands. That doesn’t guarantee that next week will finish higher but it does strongly suggest that we have many more weeks to go before we see an intermediate high (and I do think the odds favor next week going higher).
The XAU is the oldest and most diversified of the bunch listed above and also the only one that took back its 200 week MA (and did so convincingly):
Priced in the Goldman Sachs Commodity Index SLV is up 43% since the summer low and just had its best weekly close since January.
Silver:CRB also looks awesome:
I posted this dollar chart about 3 weeks ago and it has gotten much worse (much better for us):
Silver more likely higher before reaction.
Into FOMC (12/14)?
Hi BDC – Thanks for that SLV chart. Yep, it’s looking pretty good.
It appears everyone is still expecting Silver to keep running higher based on the comments here, but it just seems like it’s moved really far and really fast to the upside, and it seems like it would want to take a pause soon, correct for a bit and digest this move it just put in. Same thing with Gold and the mining stocks. This is why I pulled some profits on Friday in some silver and gold stocks to take a few chips off the table; with the intent of buying right back into the sector should we see a few weeks of consolidation.
However, I’m often an early trimmer. Maybe I should have waited a few more weeks later in December before booking some profits, as it seems everyone still thinks this move has more to go before rolling over. Regardless, there were some positions up quite nicely in the green (not too common in 2022) and I just wanted to get the 30 day wash period going, so that I could buy some of them back the first week of January. If this move just keeps on trucking I’ve still got plenty of fishing poles in the water to take advantage of it, and I can always rotate the cash I just raised into other names whenever without worrying about the calendar.
Thanks again for everyone’s technical thoughts on the current set up in Silver, Gold, and the mining stocks. Ever Upward!
I had posted this on Craig Hemke’s blog on Thursday, but it seems worth reposting here:
David Brady, is expecting this recent move in PMs to top out soon and roll over, but mentioned over on Steve Penny’s Silver Chartist blog that he intends to buy the coming pullback aggressively. It made sense to me when reading it over, that after such a big move higher in the PMs lately, some corrective action is in order.
Peak and Pullback Pending for PMs
David Brady – Sprott Money – Dec 1st, 2022
“Fed Chair Powell said a lot of things today. It was the most verbose speech I’ve heard from him. He said something for everyone, and my simple summary is as follows: Powell confirmed that interest rates will continue to rise but at a slower pace, starting with 50 basis points in December. This confirmed the pivot back on November 3. He also suggested that the terminal Fed Funds rate would be 5%, 1% higher from where we are today. More importantly, this provided an end point for this tightening cycle, even if rates remain high for some time to come, i.e., no rate cuts anytime soon. In a nutshell, the Fed will raise 0.50% twice or 0.50% and 0.25% twice, and then keep the Fed Funds rate at 5%. Markets were risk-on except for the dollar. Nothing new since November 3, and now the path higher is wide open for monetary metals and miners. But nothing goes up in a straight line.”
“Gold held support at ~1735, and with some help from the Fed recently and a weaker dollar, it is on the verge of hitting its highest level since August. However, it is close to becoming extreme overbought, which suggests the rally is running out of steam and we’re due a pullback. That said, I would not be surprised to see a negatively divergent higher high first.”
“Should Gold continue higher, it has the 200-DMA and the prior high of 1824 to contend with. Ideally, Gold takes out those two resistance levels, it becomes extreme bullish and overbought, and when everyone is looking up to 1900, down it goes again to the 1700s prior to take off.”
David Brady regularly posts over at Steve Penny’s Silver Chartist forum as a key contributor there, and recently clarified the points he had made in the Sprott Money article linked above. It seems quite relevant to this thread and conversation of where the metals and miners are at currently.
David Brady – Moderator at Silver Chartist – December 3rd
“I neglected to mention this in my article today but it needs to be said.”
1. I am expecting an imminent pullback in metals and miners and a rebound in DXY
2. Don’t get me wrong, this is just “a pullback to a higher low”. We are nowhere near the next major peak in Gold, Silver, and the miners. We have a long way to go on the upside! Keep that in mind when you consider your trading…
a. Sit tight and just weather the pullbacks, perhaps adding on dips, and ride the rally higher. = Conservative. Prudent.
b. Trade the pullbacks with ST shorts but at a fraction of your overall LONG positions. = Aggressive. Risky.
“The decision is up to you. ST down. MT/LT much, much higher imho.”
– David Brady
If there is another pull back in the near future it would be consistent with keeping me range bound. That, of course, would mean intervention continuing no matter how much damage they have done to the US and World economy. At some time it must be removed from the hands of Central Banking activity. I will continue on course for a near term “junior explorer” breakout out of my range. I will know before 2022 is over.
A consolidation of the 3 month move higher in Silver, and the recent $200 rebound in Gold, and the 2 1/2 month rip higher in the mining stocks since mid to late September, would just be a healthy corrective move, to help digest some of the gains in this big moves higher as of late.
It doesn’t need to be a steep selloff to consolidate the recent upleg, but more a sideways to down process for a few weeks to allow the daily chart indicators to cool down a little bit and reset through both time and price for a just a bit. That would be more constructive for a good Q1 Run higher in Jan – Mar than if things just keep going higher and higher in a more parabolic move exhausting buyers. Those types of excessive moves to the upside often run out of steam and then reverse down much harder; which would not be as ideal as a 2 steps forward, 1 step back, more measured climb up the staircase.
“Everyone” at the sites I visit expect a top right here just as the best 3 or 4 traders at one site expected a week ago. They got a downdraft on Monday that solidified their view but they were all wrong. Their expectations were based on the same thing that I’ve seen here for many years over and over again: A myopic focus on the short term daily and lesser charts to the exclusion of the longer term weekly chart which is often far more important especially following multi year lows. 2016 provided an extreme example of the weekly chart’s tendency to trump the daily as one “expert” after another continually thought that a pullback was imminent yet one never appeared. This is not 2016 but I think the odds still favor another 7 to 10 trading days higher (but this Monday could easily be like last Monday). GDX is currently 29.92 and I bet it will top around 34 before we get that pullback that everyone thinks is upon us.
It is very early in this big move so it makes sense that so many are still more focused on another big drop than the extremely bullish big picture. No one will be talking about hedging or raising cash in a couple months yet that’s when such would make more sense. Some things never change.
I agree that the weekly charts are still quite constructive for the PMs, and that on rallies or corrections that they trump the shorter time horizon charts, just like monthly charts trump the weekly charts, and quarterly charts trump the monthly charts, and the annual charts trump the quarterly charts… as far as establishing more meaningful trends. Even zooming all the way back to the annual charts are quite encouraging for the PM sector, and to Craig Hemke’s point on Thursday and in previous interviews for months, it is quite possible that both gold and silver can put in a higher annual close than they did last year, which would be quite constructive.
Yes, it is easy for traders to get myopic on the lessor hourly and daily charts indeed, but they are more relevant for shorter duration traders, than they are for longer-term buy and hold investors. Different charts for different trading time horizons, and sometimes in the smaller time horizons like the hourly charts or daily charts for swing-trading, it is easy to get wrong-footed or whip-sawed. This is where zooming back to the weekly charts can be very instructive for sure.
As for people expecting a top last Monday, I didn’t see people on the KER making those comments, and most of the guests here on our show that we speak with were not really expecting that. I follow as many comments as reasonable in a day over at ceo.ca, especially the more widely followed contributors out of the thousands of regular users there or the comments that are “popular” with more upvotes, and didn’t really see comments about Monday being confirmation that a top was in, nor did I see any to that effect over at Seeking Alpha. However, apparently you are reporting back that there were some vocal folks on other platforms that were calling for a top and saw the corrective move down last Monday as confirmation that this was the case. Interesting, and I could see where that may have thrown some folks off, but yeah, that is not how things developed last week at all.
Now, there were a few people we talked with that felt Silver had likely topped a few weeks back in mid-November, when it first got above $21.41 and the briefly got above $22 and reversed back down after that, thinking that was the peak. I personally was not in that camp and remained encouraged by that move, but could understand why some felt maybe that was all there was to the current move. However, after last week’s surge much higher well over $22 (that so many saw as a critical threshold) and then over $23 to close the week… it just wouldn’t surprise me to see things pullback and digest that move a bit.
My comments on raising some cash and doing a little hedging are merely in the short-term as a trade, and not a definitive longer term position. For the medium term (several months out) I expect the PM sector to keep plowing higher before making more of a meaningful intermediate-term top and rolling over. In that sense, I tend to be more in alignment with the general take David Brady had above that short-term he’s expecting a tradable pullback over the next few weeks in December or maybe early January, and then medium term several months out to longer term a year or more out, he expects much higher levels to be achieved in gold, silver, and the mining stocks. That seems like a reasonable outlook, but the markets may take a much different track, and nobody knows what will happen until it all plays out.
One day doesn’t make a market, but still… glad I hedged with JDST as it was up about 10% on the day, as the metals and miners pulled back. It was such a quick return, that I took some of it off the table today to book those profits.
Also, many of the positions I sold on Friday to harvest gains were down 4%-8% on the day, so glad to have pulled the trigger on booking the gains the end of last week, instead of waiting until today. Granted a lot can go on for the other 29 days of the wash period, but so far, glad to have side-stepped today’s rout in those larger positions that were liquidated for the short-term.
Gold Begins December Zooming Above Key Resistance at $1800
David Erfle – Friday December 2, 2022
“After ending an unprecedented seven-month losing streak by rising over 7% in November, gold began December with its largest one-day gain in two years. And since its triple bottom at $1620 in late October, Gold Futures on Thursday closed just $17 from where it began 2022 at $1833, outperforming the stock market by a wide margin this year.”
“Not bad for a metal which the Wall Street Journal declared on the front page of its September 22 issue as having “lost its status as a haven.” Two days later gold fell to $1629, the lowest daily close in more than two years. But the declaration became a case of yet another mainstream media cover-story contrarian signal of a major trend change in gold, beginning an ascent in the metal which has continued into the final month of a tumultuous year on Wall Street.”
“Gold futures rose $55, or 3.1%, to settle at $1,815 an ounce on the Comex to begin December, buoyed by weakness in the U.S. dollar and Treasury yields after Federal Reserve Chairman Jerome Powell indicated that policy makers may deliver a smaller rate increase later this month…”
Is Monetary Policy Becoming Obsolete?
Jesse Felder – The Felder Report – (12/03/2022)
Dollar Index : Fall 2022 : Elevator Down
What Floor, Please?
Added Quarterly Chart
Ackerman: DXY pop to 106.58 then to 102.34 area.
Big bullish engulfing candle for SLV:GDX weekly:
Even following the crash lows of 2020 silver smoked GDX which is unusual and a bullish sign of things to come. 2016 showed a more typical outcome as silver went up something like 50% yet GDX performed so much better that Silver:GDX fell about 50%.
Between April and September this year SLV:GDX went up 45% and SILJ:GDX went up over 30% yet clueless bears everywhere thought gold and the miners would go drastically lower. The writing was on the wall the whole time but they didn’t speak the language.
Kudos to Mathew! Stuck to his guns when Joe & company were laughing at the lows. I ventured a bottom guess same time, & hasn’t been a V recovery. I’ve lightened up marginally, on Jr’s, but UVXY keeps tanking–
Yes indeed. As was mentioned a number of times in my prior posts the last 3 months, Joe & the “Joe was right” company, were perfect contrarian indicators once again, as they advised everyone in all caps and emphatically around the lows a few months back that it was best to sell everything then go to cash at exactly the wrong time to do so.
Those folks were operating under recency bias, expecting the downtrend to keep going and going, and missed this recent tradable rally when they actually should have been deploying cash to buy into the better valuations a few months back; just like most missed the last half dozen tradeable rallies. It was the same way back in July, and it was the same way during last year’s tax loss selling season moving into the Q1 Run rally through March, and the same way last year in late September when the PMs rallied into November, etc….
Those same contrarian indicators have been quiet as church mice the last 2 months as things clearly surged higher in October and November, not just in the PMs but in the general markets as well, as the US dollar and interest rates fell conversely. They were just a conveniently silent during the other rallies that followed prior warnings for everyone to sell everything for the terrible crashes that were coming.
Most traders don’t really have the gumption for buying into oversold corrections, nor do they like selling into overbought rallies. That’s what makes a market. Rinse and repeat…
Hi Ex, in all fairness and kidding aside, I sold one third of my position in Santacruz when HighGold came out with that fabulous intercept of 18.76 G/T AU over 120.5 meters at the beginning of last week. I don’t know whether you watched that interview video I posted of their CEO Darwin Green, but they still have 36 drill intercepts to be revealed before the end of 2022. Whatever the truth machine says I feel this stock could see a POP this month and then the drills will be shut down for winter. ZZZZZZZZZZZZZZ! AEM is the senior producer that has bought into HighGold Mining. Cheers! DT
Ah-ha! So now the truth comes out with you also selling some Santacruz… (looks like we are traitors together then…. Haha!) I think Dan (in Calgary) sold a little bit of his SCZ as well, so he can join in our posse.
For clarity, I’m still very constructive on Santacruz for the medium to longer term, and really like their prospects to evolve into a solid mid-tier silver and base metals producer in both Mexico and Bolivia. I’m only booking the profits from Santacruz in 2022, so that I take advantage of other tax loss sales I’ve got in place for tax purposes, which will wash them out, but in early January I intend on getting right back into position.
Yes, all joking aside, that makes sense DT, and nothing wrong with taking some profits along the way, and rotating into stories that you think may outperform in the future.
As for HighGold, yes, that is nice to see AEM taking a 10% strategic position for sure. As mentioned in response to your posts on HighGold earlier in the week, I was also very impressed by those recent drill holes, and have reached out them a few times about trying to get them on the show, but haven’t received any responses back yet. I talked to both Darwin and his IR lady Naomi at the New Orleans Investment Conference about getting them on the KER, which they seemed receptive to, but that was before the recent bonanza-grade drill results. Maybe now they are getting swarmed with requests for interviews, but I’ll keep trying to get them on the show here for an update. Cheers!
EU – Oil – Gas – BRICS
“This is the most concerted attack on the Western financial system — on Western dominance of international trade — that we have seen since the 16th century!”
AEM has arrived at an important fork resistance.
That was a really nice move in AEM off it’s September lows to present, but that is quite similar to how many of the producers charts and larger more liquid developers charts also look. Many of the silver and gold stocks in GDXJ or SILJ or even some of the more popular junior stocsk are up between 30%-100% off their September lows and approaching different areas of resistance and short-term overbought signals.
This is why seeing the metals and miners pull back in the near-term would not be that surprising. Medium to longer-term, these moves higher still have much much further to go, but after such a big move higher in the sector recently, then some profit taking, technical trading back down at resistance, or some headwinds in response to a rebounding US dollar is still quite probable in the shorter-term (next few weeks into early January). However, if AEM and the other producers and the gold and silver can just keep on vaulting even higher for a while longer, then great, but it is normally 2 steps forward, followed by one step back.
It really depends on what you mean by “pull back in the near term” because the following weekly chart (also posted earlier above) and many others should tell you that the weekly chart is in charge not those “overbought” daily charts. A sharp intra-week drop that recovers most of the loss quickly would be fine but a normal pullback of the sort you seem to be talking about would amount to a serious abortion of sorts and shouldn’t be welcomed. Such negative action after so much excellent action in fact SHOULD surprise you. It’s exactly this weekly chart control in the face of spooky daily charts that helps to make sure that few stay aboard a young bull market.
Good points Matthew, and I agree that the weekly charts are in charge, more than the more concerning overbought signals on the daily or hourly charts. As stated a few times up above in prior comments, I’m still expecting much higher prices in gold, silver, and the mining stocks several months out in the medium term, and a year or two out in the longer term. My comment about a pullback in the near-term would be a corrective digestion of this recent move higher over the next few weeks and maybe into early January, but I’m not expecting a big or damaging pullback, just backfilling and correcting down 20% or maybe 30% of the recent rally from September to present. If all we saw was a sharp intraweek drop and then recovery, then that would be great, but likely wouldn’t be enough to fuel a more sustained move higher into the seasonally strong Q1 Run. I’d rather see a mild gradual to down move for a few weeks in December or maybe the first week of January, and then a continuation of the rally for Jan-Mar, but we’ll see how it goes…
The power exhibited by AEM last week and several before makes selling in any significant size unappealing. Look what happened in 2019 when it rose for 13 weeks straight. To be clear, yes it could easily pull back inside its Bollinger Bands but is attempting to scalp a few bucks within a powerful rally a good idea for the vast majority of investors?
To be clear, I don’t think the vast majority of investors should be trying to trade shorter-duration moves, or even managing their own money in many cases. Using the shorter-term charts are best suited for active traders that are nimble enough with enough trading experience to get into and out of trades based on what they are seeing in the pricing action. We do have some more experienced traders that comment or follow this site, just like on any site or in any sector.
We also have guests that we bring on the show that regularly discuss their shorter-term trading strategies, that may only be relevant for a few days or few weeks… but clearly those comments are also not suited for most investors. However, they are quite helpful for short-term traders if that is their approach.
Conversely, we have other guests on discussing their trading strategies for longer time frames, and many of those didn’t work out so great or align with what many of the commenters here on the site are discussing with their trading day in and day out. There is no one-size-fits all discussion or analysis that will fit everyone’s unique risk tolerance levels, trading psychology, investing approach, or time horizons.
Most investors are not good traders, so I’d never presume that what I’m doing personally or highlighting as a potential pathway in the near-term, as a more active swing-trader, or sometimes medium-term position-trader, is the best approach for most investors. My comments are just my own unique take on things, just like everyone’s comments are. That is what makes this such an insightful forum of different ideas from different contributors. Investors should know themselves and what comments are actionable and appropriate for their trading strategies, and which ones are not.
However, it should also be noted that most investors are not even that good at timing medium or long duration moves, and repeatedly miss getting positioned correctly for several month (or even several year) rallies or corrections, so it’s all relative and comes down to people’s timeframes for a trade. This is all evidenced by the majority of investors of all stripes getting fleeced in the general markets, in commodities, in the precious metals, and the cryptos since the last part of 2021 to present. It’s not easy, and most fail to act decisively when trading situations arise, or to admit they are wrong and limit losses if a trade turns against them. That’s always been the case and always will be the case.
Beware Dollar Approaching Support – Ira Epstein’s Metals Video (12/02/2022)
Break in Longer Term Interest Rates may be Nearing End – Ira’s Financial Markets Video (12/02/2022)
It was back in Sept when $Silver:$Gold ratio chart triggered a buy signal. You posted that chart too. You and that scotch guy (Glen) have been pounding the table. AEM is leading the pack this time around and I’m not surprised. I think It has a date with $80 by the spring time.
Here are my top holdings. I like companies that pay dividends
Hi CaliJoe, that’s a high quality group of miners you’ve got there. I’ve said once or twice in the last 1 or 2 years that the senior miners have never looked as good as they do these days. The difference between now and 2010 is night and day. I wanted nothing to do with most of them during the last bull market but now they look superb. You will probably get surprising dividend growth to go with capital gains that could surprise both of us. The cash flow generation growth that’s coming could turn them into the next FAANGs complete with ridiculous valuations.
Here’s one Silver:Gold chart that I posted in September and it looks great:
Wow…really good stuff in this thread.
S2R.AX has scooped up a hugh land package around AEM’s Fosterville, hoping to piggyback on their success.
So Matthew are you looking at silver breaking through that $30 level in 2023???
It would be surprising if Silver doesn’t make a run at that $30 resistance level in 2023 and then blast through it. After that, there isn’t much resistance between $30 and $49, so things could really escalate quickly….
If that happens I’ll have to buy a new shovel and wheelbarrow to scoop up all the money I’m gonna make
Agreed Terry. Think about the moves we’ll see in the Silver miners in that kind of environment.
Since the Fed is wrapping up their rate hiking cycle in the first half of next year (likely in Q1), and the US Dollar appears to have put in a top this year and is now entering a period of a longer-term decline (with some counter-trend rallies of course), as we move into a period of economic malaise next year with stickier than desired inflation, then it seems like an ideal environment for the PMs to have a good run in 2023 all things considered.
Now, obviously if there is a big “sell everything” market rout that could derail things for the PM sector too; or if the recession got particularly ugly, it could impact commodities, thus Silver’s industrial component side. However, it’s more likely that investment demand in the monetary metals side strength would outweigh the industrial component side weakness and drive Silver higher alongside Gold. The second half of 2023 should be pretty interesting indeed.
Bachman Turner Overdrive – “You Ain’t Seen Nothing Yet”
Never bad hearing a little BTO….. have always wondered why the Guess Who have never made it into the rock’n’roll hall of fame
I not really that familiar with BTO’s other songs or the Guess Who, but did listen to the The Who quite a bit… and they did make it to the rock n’ roll hall of fame…
Hopefully we’ll see the PM sector rock n roll next year as well… 😉
Wolfster: YES. Easily.
Wow. Thanks Matthew. I’ll stay sitting tight with my impact and Kootenay …. Anyone else have shared from the spin out????Do they actual trade anywhere ???
And any thoughts on the base metals like copper and nickel for 2023 Matthew??? Also appreciate the input.
I think copper and nickel will do well in ’23 but not nearly as well as silver.
Stockcharts doesn’t support nickel charting for some reason.
Silver is getting ready to blast off even against copper:
Wonderful trip down musical memory lane this morning with those two bands.
Hope you are right about silver Matthew but I have gotten to the point that exterterrestrials are bleeding silver at low prices to take outside our galaxy and have a 50 year contract with JPM to buy below spec.
Yeah … that is the JPM silver round. The Aliens have a stranger one.
Have no fear, Mother Nature will kick’em all in the rear!
Trend Quality: https://tinyurl.com/k8h8jpm9
PMs Continue Stronger Into Sunday
More NatGas Bottoming
Ackerman: Possible DXY pop to 106.58 …
82 comments on weekend show, sure sign of an uptrend. Also sold 1/3 of Santa Cruz position. Cost basis 12 cents US, sold at 39 cents. Outcrop, OCGSF also good performer
Good trading Buzz, and welcome to the club for taking profits in Santacruz Silver. Haha!
I’m still a big fan and believe it’s going much much higher over the next 1-2 years, and I’m already feeling a portfolio void without it after only selling it on Friday. Can’t wait to get back into position in it again in early January (after the 30 day wash period).
Silver is beginning its first major move since 2008 in which its 200 week MA is already rising. It was flat at the 2020 low and falling steeply at the 2015 low. The move off the 2008 low was a 6-fold advance in 2.5 years. A repeat would put silver above $100 by February 2025 (that’s not a prediction).
+100 Imagine where the Silver mining stocks could get to in a scenario like that with triple digit silver…
Thanks for the charts Matthew! Thanks to contributors.
Usd target on a previous call of mine has hit my zone to the tee..1.04-1.02 i expect futher downside to that 1.02 level give or take.
gold resistance stands at $1793 but the stronger support stands at around $1778-$1780 ish look for gold to continue its projectory higher into that $1843 ish level rest and higher..
Of the three daily, weekly and monthly, the weekly is very telling here when combing all three and pass history/patterns
This move higher in gold is catching many many by surprise and keeping them on the sidelines. There will be times of corrections but currently i see short stops and higher. A higher correction should come down the road imo
Bought 1st of 3 levels of UNG @ &11.49
CORRECTION: UNG ( above) $17.49
2nd level buy – UNG (6%) below $17.49—. $16.44
right, do not forget NAT GAS…Looks on daily, to want retest of oct. low or an expansion down…seasonal lows are late DEC. early Jan….glta
don’t BOIL yourself when cooking w it…lol
HEY larry, here we are on Monday 12/12 my 17.49 & 16.44 buys is better than a 20 gain in a week. It was just a trade, now I’m just raising stops
Despite …. I say Despite paper metal prices, I finished positive. So based on everything I have heard, this is when I buy a Lambo…
I find it hard to believe that the FED doesn’t have a forward looking outlook (at least there’s got to be some more people in there like @fedguy12 … Joseph Wang). The insights that he provided on the workings of the FED and their effects on the overall markets was truly outstanding and they make me question how lacking in foresight they truly are.
It’s good to remember who they work for, after all (i.e., the owners of the member banks of the FED, not the public or the US).
Here is the Palisades Gold Radio episode where he was interviewed: