Dave Erfle – A Healthy And Expected Correction Within The Larger PM Bull Market Cycle
Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us to review the volatility this week in gold, silver, and the precious metals stocks. The whipsaw markets came on the back of a flurry of economic data from the Fed meeting and press conference mid-week, and the stronger-than-expected jobs number and ISM manufacturing data that hit on Friday.
While the end of the week saw a quick reversal of the bullish trend from earlier in the week, he pointed out that a corrective move should not be a surprise here as both silver and the mining stocks have been signaling for a few weeks that the move in the PMs was in need of some consolidation. Dave also points out that the January monthly close near $1950 in gold was very constructive for the longer-term bull market, and that gold was very overbought and in need of a digestive period, after a few months of upwards price action, adding around $350 off it’s lows in November to where it advanced to earlier this week.
Next we shifted over to the performance of the mining stocks, and with both GDX and GDXJ up over 50% off their September lows, and many individual mining stock up 100% – 200%, we asked if he felt this was a good time to sell into the recent strength, or in front of any further corrective action. Dave reviewed that he got positioned at the end of last year at good entry points and a solid cost basis in many stocks, and that it is far too early to start selling at this point in the 7 year bull cycle. He advocated having patience not to over-trade, and that he is positioned in companies in his portfolio for 3x or 300% gains at a minimum, before he will start taking profits in part of the positions.