Dave Erfle – Prior Macroeconomic Headwinds Are Now Tailwinds For The Precious Metals Sector
Dave Erfle, Founder and Editor of the Junior Miner Junky, outlines his technical outlook on the precious metals sector, and which macroeconomic drivers will continue be in focus as this year unfolds. We start off reviewing the general consensus that gold, silver, and the PM mining stocks bottomed in Q4 of last year, and that a new upleg is underway in the sector. Dave shares key resistance levels he is watching for in gold, as well as GDX and GDXJ, and that while we may see a short-term corrective move, the larger trend is still higher.
Next we focus on the macroeconomic factors shaping 2023 from the lingering inflation, continued stagflation, the potential for a worse recession and deflation (like we are seeing in manufacturing, housing, and general equities), central bank policies, and geopolitical tensions. Barring some unforeseen black swan event creating a panic selling scenario, the set up is there for the general markets to keep correcting down in an orderly fashion, where the precious metals sector continues to diverge by outperforming.
We wrap up with getting Dave’s thoughts on the gold mining stocks, from the potential for producers to have their margins expand this year, to the high probability of the junior mining stocks to get re-rated higher closer to historic norms.