Dave Erfle – As Gold Continues Up Near All-Time Highs, Here Are Some Pro Investing Tips For The PM Mining Stocks
Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us to discuss the continued positive momentum higher in the precious metals sector, with gold around $2040 and closing in on the all-time high, silver back above $25, and the PM stocks starting to outperform. We start off getting his technical outlook on the strong monthly & quarterly close for gold in March, and the larger cup & handle pattern that, if triggered, could resolve to a much higher price level in gold. Dave reiterates that what may cause an influx of new buyers to come in and push prices higher will be once the 12-year resistance level of $2000 is a solid floor moving forward.
For the balance of the interview, we really cover a lot of ground on getting his pro investor tips on what kind of companies to be positioned in that will have the most upside torque in a rising metals price environment. We discuss looking for companies with well-defined and derisked multi-million ounce deposits, solid economic studies in place, quality management teams that have access to capital and a history of doing raises at the right times, good insider ownership of the stock from their own participation, a limited warrant overhang, and plans for a big-board dual-listing on the US exchanges.
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GDX : https://postimg.cc/Mffc4759 : Often a pull back now would be expected; however, the gap at 36 may act as a magnet, along with the targets: resistance at 78.6% and 61.8% BackBox expansion to 37.51.
Here is an interesting thought from technician Patrick Karem of Bad Charts.
Patrick Karim @badcharts1
“Miners do NOT track gold prices. They track gold’s performance versus SPX.”
“Easy to estimate what $silj, $paas, and $asa would of looked like if their data series went back more.
“All I have to do is look at #gold vs $spx ratio chart. It guides the capital flows that everybody follows.
No rocket science required.”
Central Bank Gold Buying Update: 2023 Sees The Strongest Start To A Year In More Than A Decade
Anna Golubova – Kitco – Tuesday April 04, 2023
“The gold market continued to receive support from central banks as countries kept adding gold to their reserves in February, marking the strongest start to the year since at least 2010, according to the latest data released by the World Gold Council (WGC).”
“Global gold reserves increased by 52 tonnes in February, rising for the 11th month in a row, the WGC said Tuesday. In January, central banks bought 74 tonnes of gold. And that follows record levels of last year, with 1,136 tonnes purchased.”
“Year-to-date, central banks’ net purchases stand at 125 tonnes. “This is the strongest start to a year back to at least 2010 – when central banks became net buyers on an annual basis,” said WGC’s senior analyst Krishan Gopaul.”
Gold Closes Out Quarter At All-Time Highs, $3,000 Upside Target
Kimble Charting – Tuesday, April 04, 2023
“Today, we revisit a pattern that we have highlighted several times over the past 5 years: The cup with handle.”
“Below is a long-term ‘monthly’ chart of gold highlighting the pattern. Note that just last month, gold closed at monthly and quarterly all-time highs at (1). This has gold bulls quite eager to see if this is the major breakout they have been waiting for. If so, the first upside price target (1.618 Fibonacci level) is at $3,000. That level is nearly 50% higher. Stay tuned!”
https://www.zerohedge.com/news/2023-04-04/gold-closes-out-quarter-all-time-highs-3000-upside-target
(ORE) (ORZCF) Orezone Reports Strong Q1-2023 Gold Production at Its Bomboré Gold Mine
5 Apr 2023
– Gold production of 41,301 oz.
– Gold sales of 43,139 oz at an average realized price of US$1,892 per oz resulting in sales proceeds of US$81.6 million.
– Cash position of US$45.2 million at March 31, 2023, an increase of US$36.0 million for the quarter.
– Repaid US$9.8M of principal on senior loans.
Patrick Downey, President & CEO stated, “Following a successful ramp-up to commercial production in Q4-2022, Q1 marks a strong first full quarter of production at Bomboré. The Company remains well-positioned to meet its 2023 annual production guidance of 140,000 to 155,000 ounces, while further reducing its senior debt and improving its treasury.”
https://ceo.ca/@globenewswire/orezone-reports-strong-q1-2023-gold-production-at-its
In a morning missive our buddy Goldfinger (Robert Sinn) nailed the set-up and sentiment in the PM sector:
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“It’s important to remember that it was only in early March when everyone hated precious metals, and especially hated mining stocks.”
“To be sure, this ferocity of this rally in metals, and even the miners, has taken the vast majority by surprise. Many of the long-time investors in this sector aren’t even believers anymore. After all, they’ve been fooled too many times and have decided they ‘won’t be fooled again’.”
“This creates fertile soil for an upside overshoot in precious metals against a backdrop of rapidly deteriorating economic data and a Fed that doesn’t have a good next move – is inflation the bigger risk? OR is over-tightening into a rapidly deteriorating economy the bigger risk?”
“The odds are shifting towards the latter…”
– Goldfinger
That has also been my big takeaway in talking to so many different fund managers, newsletter writers, company executives, etc… over the last few months…. that “many of the long-time investors in this sector aren’t even believers anymore.”
Some of the sentiment and comments I hear off-mic from well-known folks in the industry had me biting my tongue and shaking my head for some time. Even if presented with the bevvy of fundamental and technical reasons for gold to have made a bottom last year and to keep trucking higher, without needed to perpetually retest old lows was lost on many of them. There were also a number of folks still ruminating over whether we’d see a 2013 style waterfall decline again last year, AFTER gold had blasted up over $300 and silver had gone from the $19s briefly to up over $24.
If the die-hard fans of the sector stopped believing in a rally, then why in the world did any of them think the generalist investors would give a rip about it? Clearly, that is the exact kind of environment that allows rallies to form, as the bull likes to shake as many riders off his back as he climbs the wall of worry.
It’s crazy because there are so many fundamental catalysts stacking up in the favor of the precious metals complex from insane monetary policy, insane fiscal policy, recession signals being triggered, a banking crisis, and now OPEC giving the finger to US and cutting production to boost energy prices.
Even putting aside the clearly bullish macro setup, and just looking at the price action long time supporters of the sector were not satiated. Despite how the PMs had ripped higher from September – January, or that gold had closed the prior year of 2022 at the highest average annual price, or that gold and silver were the best performing asset classes in 2022 (barring the 10-year yield) when most sectors were sucking wind, and despite the reality that the PMs and kicked off the year so positively with the supposed “January Effect,” many pundits were ready to write off the PMs by mid-Februrary, and were flat out bearish to despondent by early March. (WTF?)
> Remember the calls just in Feb/Mar of this year from many that Gold needed to go back and test the lows from last year at $1620? (Oh really?)
Remember the calls last fall that Gold had broken key support and likely would go back into the $1500s, or test the $1450 pandemic crash low, or even the nutty calls that the yellow metal may go all the way back down to $1375 and retest that level? (that’s how nuts sentiment had become by last September…. you know when some vocal posters were advising people to sell everything and go to cash).
Heck, even a few weeks back in March, when gold and silver and the mining stocks quickly snapped back higher, there were ding-dongs on here suggesting to be careful and not get ahead of ourselves, expecting the other shoe to drop…
Meanwhile, gold and silver and the PM mining stocks ignored all this negative sentiment for the last 6 months, and have been an steady move higher since the September lows in Silver and the PM mining stocks. Gold took a little longer to get the memo, but it did finally bottom on Nov 4th at $1618 and has not looked back since then… now gold futures are trading at $2035, and the price was just up at $2048 level in overseas trading within the last day.
This last 6 months has been similar to the rallies out of despondency that we saw in the PMs for the first 8 months of 2016, or in the fall of 2018, or the spring of 2019, or coming out of the pandemic crash of 2020.
Very few investors were actually buying low when the metals and related mining stocks were on silly valuations, and instead, each time went cowering to cash to hide. After the metals rallied up nicely for months, and there were solid double-digit to triple-digit gains in many mining stocks…. THEN the herd investors piled back in after the easy gains were made. (proving once again that most investors are not really value investors, and definitely not contrarians, and instead are nothing more than momentum investors — as our buddy the Hedgeless Horseman has also pointed out so many times).
Some things never change. Gotta love it! 😉
Same ol … same ol second day of intervention this week. Nonbelievers may wish to go to http://www.gata.org and read the recent article by Ted Butler. Craig has one also while you are there.
So this is hilarious…
The original title on Yahoo Finance of this release was:
“Gold Nears All-time Highs As Investors Pile Into Boomer Rocks”
https://cdn-ceo-ca.s3.amazonaws.com/1i2r791-Gold%20Boomer%20Rocks.JPG
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Obviously, since then this girls editor changed the title to something less divisive, implying that only baby boomers buy the “pet rock.”
Now the title reads:
Gold Inching Towards All-time Highs As Investors Pile Into The Safe Haven
Yeah sweetheart…. there are more than just baby boomers buying gold, and it is more than just a “boomer rock”. Haha!
It’s funny that a store of value for 5,000 years, is being attributed to only 1 demographic segment of society at present.
Maybe this well-seasoned “millennial reporter” needs to ask herself why central banks continue to buy and horde the yellow metal.
But her invisible crypt money will hold its value forever!
Good one BDC! 🙂
Central Bank Gold Buying Update: 2023 Sees The Strongest Start To A Year In More Than A Decade
Anna Golubova – Kitco – Tuesday April 04, 2023
“The gold market continued to receive support from central banks as countries kept adding gold to their reserves in February, marking the strongest start to the year since at least 2010, according to the latest data released by the World Gold Council (WGC).”
“Global gold reserves increased by 52 tonnes in February, rising for the 11th month in a row, the WGC said Tuesday. In January, central banks bought 74 tonnes of gold. And that follows record levels of last year, with 1,136 tonnes purchased.”
“Year-to-date, central banks’ net purchases stand at 125 tonnes. “This is the strongest start to a year back to at least 2010 – when central banks became net buyers on an annual basis,” said WGC’s senior analyst Krishan Gopaul.”
Apparently Central Banks are really into “Boomer Rocks.”
When that shifts to them only holding “Millennial Cryptos” then we’ll know the tide has turned…
Until then though, the message is pretty clear what is money.
I read the article: Interesting to note that Gareth Soloway is quoted for the later half of the article. I don’t think he is a “baby boomer” (“By 2024, I would actually say we’ll get well above $3,000, maybe $3,500,” said Soloway. “That’s going to be the monster up year.”)
I have noticed in the past year that article titles DO NOT represent the content or context – they are merely designed to play on the emotions of the reader to entice them to click-and-read. I also know that the author, in many cases, is not responsible for the article’s title and can request a change through the editor.
Yep good points BrianE. I notice that on Yahoo Finance, Investing.com, and even OilPrice.com, that often the titles & even the content will change on link throughout the day (editing the article to fit with conditions that develop throughout the day, but also rewriting and masking the original points in an article if they are stale-dated in a few hours of the open).
In this case, I saw that article rebranded with a new title focusing on Gold as a “Safe Haven” versus “Boomer Rocks” so it’s possible the lady’s editor changed it to less divisive title after the fact.
As for the $3000 to $3500 call that Gareth Soloway made, that is in harmony with the cup & handle pattern projections for price that Jordan mentioned in his interview today, and has mentioned in the past (even noting them the middle of last year for when the C&H pattern resolves over the next 2 years). Check out the very end of Jordan’s interview for those calls for $3000-$4000 gold by 2025.
https://www.kereport.com/2023/04/05/jordan-roy-byrne-gold-silver-gdx-gdxj-upside-price-targets/
The more articles there are about pet rocks, the more it indicates that the walls are closing in on criminal manipulators. Find out who is on the short side of metals, and you will find the authors of pet rock articles. Fortunately pet rocks have their own Veterinarians called geologists.
I trimmed CDE, GDXJ and HL today and bought BOIL and even a little more IPT, BBB, and KTN.
Good trading Matthew, pulling some profits in the larger cap names and rotating in to some of the smaller junior plays and some nat gas exposure.
Yesterday, I pulled some profits on Coeur, Guanajuato, and Calibre, and added to UEC and Uranium Royalty Corp.
Added back Labrador Gold for about the 5th time. They still look like they are on the same fault as New Found (Appleton).
I don’t own it anymore but how hard would it be for Newfound to just take this out for $0.50 a share? They already own 10% if I’m not mistaken.
Maybe NFG waiting for Lab to put millions into drilling holes before buying it cheap.
Saturation: https://tinyurl.com/52euebw7
Gold Consolidation. PMs Strong.
Final NatGas Bottom?