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Craig Hemke – Factors Driving The Precious Metals Sector

Craig Hemke, Founder and Editor of TF Metals Report, joins us to review a number of factors, both technical and macroeconomic, that are driving the precious metals sector prices.  We start off by observing the continued run higher in gold the last few months, with gold well above $1900 and heading to even higher levels today. However, Craig notes that silver has been stuck around the $24 level for a month now.   Since it led the precious metals mining stocks both down the middle of last year and back up from September to present, that this may point to a  corrective digestive period in the PMs in the near term.  Craig feels that any corrective move would be more mild, as the macro factors are just not there in the bonds or interest rates, in the US dollar, or in COT positioning for a big crash in the PMs to occur.

 

The discussion then evolves into looking at how the 2 forces of economic weakness and recession hurting demand, could be counter-balanced with legitimate concerns of new supply of metals coming to market or even being available in current stockpiles and exchanges. Craig points out the very low inventories of many metals on the LME, or Comex, or even backing electronic funds, and discusses the recent comments from Zoltan Posar on the problematic supply challenges commodities may face, while noting how critical they are for current policy initiatives moving forward.

 

 

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Click here to visit Craig’s site – TF Metals Report

Discussion
37 Comments
    Jan 19, 2023 19:38 PM

    Stock market news live updates: Stocks extend losses amid earnings, data, Fedspeak

    Dani Romero · Yahoo Finance – Thu, January 19, 2023

    “U.S. stocks ended the day lower Thursday as investors dissected the latest batch of economic data, more Fedspeak, and the start of earnings season from corporate tech giants.”

    https://finance.yahoo.com/news/stock-market-news-live-updates-january-19-2023-130007540.html

    Reply
    Jan 19, 2023 19:47 PM

    Zoltan Pozsar: Put 20% Of Portfolio In Commodities, QE Expected By End of 2023

    January 9, 2023

    “Capping his ‘war’ series in his latest analyst note, Credit Suisse contributor Zoltan Pozsar highlighted that the real ‘hot war’ threat to geopolitics is the final piece that’s intended to shake the economic order–something the investors should account for in pruning up their portfolio.”

    “Still on his Bretton Woods III postulate where commodities will dictate the new world order, Pozsar summarized the geopolitical shifts he highlighted in 2022 and how they could affect the movement in world order.”

    https://thedeepdive.ca/zoltan-pozsar-put-20-of-portfolio-in-commodities-qe-expected-by-end-of-2023/

    Reply
      Jan 19, 2023 19:47 PM

      BHP Expects China To Underpin Commodities Demand In 2023

      Reuters | January 18, 2023

      “China is set to be a stabilizing force for commodities demand this year as developed nations face economic headwinds, BHP Group Ltd said on Thursday as it posted higher quarterly iron ore shipments that edged past expectations.”

      “Its view contrasts with that of peer Rio Tinto, which said this week that China’s reopening from covid-19 restrictions could raise near-term risks of labour and supply-chain shortages.”

      “Both, however, see China’s measures to support its property sector as underpinning solid demand for their steel-making products.”

      https://www.mining.com/web/bhp-second-quarter-iron-ore-output-rises-1/

      Reply
    Jan 19, 2023 19:49 PM

    Fed’s Williams Says Fed Needs More Rate Rises To Cool Inflation

    Michael S. Derby – Thu, January 19, 2023

    https://finance.yahoo.com/news/feds-williams-says-fed-needs-233645417.html

    Reply
    Jan 19, 2023 19:51 PM

    High interest rates because Consumer Protection moved under The Fed under Trump. Designed to curb Bank abuse, put under Bankers.
    (Ask Mulvaney how that happened)

    Reply
    Jan 19, 2023 19:22 PM

    Luke Gromen – Pricing Oil In Gold Is “Inevitable”

    Wealthion

    https://youtu.be/_0c5Ml3rH7k

    Reply
    Jan 19, 2023 19:35 PM

    Peru Unrest Threatens To Choke Off Almost 2% Of Global Copper supply

    Bloomberg News – January 19, 2023

    “Protests in Peru are threatening to choke off access to almost $4 billion worth of copper just as China’s emergence from Covid lockdowns promises to boost demand.”

    “Peru’s third-largest copper mine, Las Bambas, hasn’t dispatched copper concentrate since Jan. 3 due to security concerns. Glencore Plc’s Antapaccay is also facing restrictions. The mines, which share the same highway access to ports, together account for nearly 2% of the world’s copper output.”

    https://www.mining.com/web/peru-unrest-threatens-to-choke-off-almost-2-of-global-copper-supply/

    Reply
    Jan 19, 2023 19:39 PM

    John Rubino – Thursday Conversation on TF Metals:

    “Our old friend John Rubino stops by today to give us an update on the economy, The Fed, monetary policy and the new way you can access his work.”

    https://www.tfmetalsreport.com/podcast/11914/thursday-conversation-john-rubino

    Reply
    Jan 19, 2023 19:51 PM

    Uranium’s Third Bull Market Since 1968 Has Further To Run

    Frik Els | January 19, 2023

    “December saw Japan adopting a nuclear policy which will restart the country’s nuclear fleet, extend ageing reactors operating life beyond the current 60-year limit and build new ones.”

    “Also in December, the Indian government approved five new nuclear plants and announced financing for ten plants as part of the country’s goal to triple its reactor fleet over the next decade.”

    “The US strategic uranium reserve also awarded its first contracts and while the volumes are not material, the prices paid by the US for the uranium were as high as $70 per pound:”

    “Given that current spot prices are approximately $50, we believe that this excess price paid for U.S.-origin material reflects the growing concerns by the U.S. Department of Energy about continuing to rely on Russian and other non-friendly countries for critical supply chains.”

    https://www.mining.com/chart-uraniums-third-bull-market-since-1968-has-further-to-run/

    Reply
    Jan 20, 2023 20:07 AM

    Despite some of the posts I’m reading on other sites and social media, that are far from bullish or and more like PTSD from wounded investors that refuse to see the new situation that has developed since September of last year, or look at the sector through the lens of how most fund managers or general analysts would (which is decidedly not stewing over a basket of tiny juniors as the barometer).

    Personally, I’m a bit more encouraged by how things have developed lately in the resource stocks, and most days my account has been in the green not the red (despite so many going about about all the red they are seeing on their screens), but admittedly, is more weighted to the quality growth oriented mid-tier and smaller producers, larger developers with real projects, royalty companies, a few of the legit PM exploration stocks, and with a few base metals and uranium miners mixed in for diversification from just the gold/silver mining exposure that is so heavily weighted.

    The continued “wall of worry” from so many investors, or comments about the mining stocks not doing well in concert with the moves in the metals, are exactly what it was like at other key turns in 2016, fall of 2018, spring of 2019, spring of 2020, etc…

    Over at ceo.ca there were some folks suggesting that the mining stocks were all still in the gutter, that most were still down at all-time lows, and I just had to shake my head and respond back to that incorrect notion some folks in the tinier microcap juniors may have, but they are missing the forest for a few junior trees…

    ___________________________________

    $GDX and $GDXJ (mostly the #producers, and advanced #developers) were up over 50% off their September lows, and most of the higher quality #gold and #silver juniors were up 50%-150% off their lows and have rallied for the last 4 months. That is outperformance over the underlying moves in the metals.

    Sure most of the penny dreadfuls didn’t move much, but that is the way it is every single time when we see major turns from bearish to bullish in the #PreciousMetals sector. The big boys move first.

    https://ceo.ca/all?c5f1e1e98bf8

    Reply
    Jan 20, 2023 20:12 AM

    Australian gold price flirts with record high, M&A could return with a vengeance in 2023

    Reuben Adams – Gold Digger – 01/20/2023

    “Gold prices continued to rally this week, almost hitting the $US1,930/oz mark on Friday. That’s close to a record high in Aussie dollar terms; great news for local miners who are looking to offset ballooning production costs.”

    – Gold merger and acquisition (M&A) market slowed in 2022, but is expected to pick up again in 2023

    “Gold prices are rallying as investors seek safety as recession and default risks won’t be going away anytime soon,” OANDA’s Ed Moya says.

    https://stockhead.com.au/resources/gold-digger-australian-gold-price-flirts-with-record-high-ma-could-return-with-a-vengeance-in-2023/

    Reply
    Jan 20, 2023 20:57 AM

    This was fantastic; KER ROCKS!

    Reply
    Jan 20, 2023 20:45 AM

    If you are a shareholder of Fortuna Silver Mines, (T-FVI) there is a news release out this morning that they are under investigation, I don’t want to say anymore because I see the information on one site but not another.

    Reply
    Jan 20, 2023 20:09 AM

    Oh no… Brixton and Emerita both have good drill results on a Friday.My account is doomed again.

    Reply
    Jan 20, 2023 20:16 AM

    Just another FREAKY FRIDAY…………….. OO

    Reply
    Jan 20, 2023 20:37 AM

    Interesting opening stat: if I pull up my account by “gains” first, every stock in the green opened down, except Silver Tiger which was up 1.0%. Now there is a stat you can take to the bank. Well, really not because nothing to take to the bank. No correlation of any kind with that opening.. 😎

    Reply
    Jan 20, 2023 20:55 AM

    Were AG’s earnings really that bad to warrant such a massive selloff? (It’s really been selling off since early November.)

    Looks like it will be stuck in the mud for a long time. Will the rest of the sector follow?

    AG:HL ratio is testing the pivot set in November 2016. When it rains it pours.

    Reply
    Jan 20, 2023 20:35 AM

    If you look at the weekly AG:SIL chart going back to 2015, the lows form a perfect bottom ascending rail and the highs form a flat top rail (with a false breakout in 2021).

    The ratio is approaching that bottom rail from which it has bounced repeatedly over the last 7 years. A breakdown here would suck for AG.

    You could go long AG here and use that bottom rail as a stop loss, although we are so close its probably best to wait for a weekly swing low in the ratio. My guess if if AG really is going to break down vs SIL through that multiyear bottom rail, AG’s decline is about to go into turbo mode since the bottom rail also forms the neckline of a massive H&S.

    Or just wait until AG itself recovers $9 (if ever haha).

    Reply
    Jan 20, 2023 20:47 AM

    Brixton is experiencing an early “tax-loss” effect this month. It’s a though sentiment in the jr space is still at rock-bottom lows. MAtt?

    Reply
      Jan 20, 2023 20:58 AM

      The next couple of weeks across the PM sector will be interesting to say the least. I am still as bullish as can be, despite AG being a bit of a dud for me.

      Reply
      Jan 20, 2023 20:32 AM

      Brixton’s pullback has several normal drivers:
      -It became weekly overbought
      -Cyclically it was due for a break as the recent peak came 26 weeks after its July low
      -It gained 182% in 6 months
      -Most of the 2022 drill results were in as it topped which always sparks selling

      It might need to work its way a bit lower but even if if it doesn’t it could be many weeks before it breaks out to above this month’s high.
      A significant positive in my opinion is the way it climbed over the last 6 months. It was never a confident looking runaway market driven by FOMO. Instead, it looked like the opposite and I’d bet it sparked more selling urgency than buying as scared retail investors hastily sold into strength as if it was their last chance to get out. On the following chart notice that it sold off hard and for a long time following each of the overbought RSI readings since 2016. The same is unlikely with the current technical setup in my opinion. This move has been the healthiest by far and is very likely just getting started.
      https://stockcharts.com/h-sc/ui?s=BBB.V&p=W&yr=7&mn=7&dy=0&id=p35276499556&a=1300732103

      Reply
    Jan 20, 2023 20:13 AM

    EXK’s 10 DMA has positively crossed the 200 DMA, which I think now sets up a large upward move (potentially very large). There are worse trade ideas than getting long here and using a close below the 200 dma as a stop loss.

    We do not want to see its 10 DMA turn down or heaven forbid cross back below the 200 DMA. But that’s something to worry about when and if it happens. Right now the picture is primed for a massive move IMO and it could come in the form of an epic gap up on Monday.

    Time for another rug pull? I don’t think so. Silver is going to make a push to $26+.

    Reply
    Jan 20, 2023 20:11 AM

    Silver priced in yen ($silver:$xjy) is set up to explode higher, imminently.

    This is the type of set up that produces huge silver moves priced in USD (like doubling in price) and should really provide a huge boost to the silver miners.

    Reply
    Jan 20, 2023 20:13 AM

    My dog said I was wasting my time today and he wanted some food and treats. He is probably right. Afterall he is smart enough to not pay taxes.

    Reply
      Jan 20, 2023 20:11 AM

      I agree with your dog Lake….. at least for the stocks I follow. Slower than last Friday that was before an American long weekend

      Reply
    Jan 20, 2023 20:20 AM

    CDNX taking a breather for a week er two, I don’t see a problem with it going through the rapidly falling 200mda before the next rest IMHO.

    https://schrts.co/RFAIiDNv

    Reply
      Jan 20, 2023 20:27 AM

      If someone can post a three year monthly of the CDNX with a bunch of bells and whistles I would appreciate it. The 3 year monthly tells the whole story, (;-D

      Reply
      Jan 20, 2023 20:36 AM

      This is the CDNX 3 year weekly…

      https://schrts.co/nTCwiqxn

      Reply

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