Dave Erfle – The Technical Setup, Longer-Term Pattern, And Historical Analogs Suggest Gold Is Set Up For A Major Move Higher
Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us to discuss the technical setup in gold, silver, GDX, and GDXJ, and a recent historical analog that suggests the precious metals sector is ready for a major move higher. We start off discussing the technical setup, and that gold just put in it’s highest monthly and quarterly close in March, and was just $1 away from its highest weekly close in early April. After such a solid move, and despite having remained overbought, the PMs are not falling out of bed here and have not yet corrected down as much as many have been calling for. Gold has been hovering around $2020, while silver has been remained back above $25, and the more liquid PM stocks have been outperforming the upward moves in the metals for the last 6 months and especially since the banking crisis in March. Dave provides some support and resistance levels he is watching closely in the PM sector for the short to medium-term.
Next we discussed the longer-term 12 year 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. He also compares this set up to the period in the early 2000’s when gold had spend 15 years trying to break solidly above $500, out of a similar cup & handle pattern, and it eventually broke all the way up to $1921, essentially going up 4-fold. This similar big picture setup bodes well for much higher gold prices in the longer-term.
We wrap up with getting Dave to outline how he’s been approaching investing in the gold and silver mining stocks, favorable pricing environments, what to look for in management, how having a few optionality plays make sense, the importance of companies that are well-capitalized an know how to raise at the right times, and the leverage and outperformance in the mining shares that is still to unfold when the metals truly break out to new highs.