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.




Click here to visit the Junior Miner Junky website to follow along with Dave’s comments on PMs and the stocks he is buying or selling.

    Apr 11, 2023 11:44 PM

    There Is Chasm Between Gold Price And Gold Mining Stock Valuations

    Frik Els – April 4, 2023

    “The current ratio between the metal and gold stocks as represented by the NYSE Arca Gold Mining Index, is not that far off historic lows struck in 2015 and shows that gold stocks have been underperforming gold for more than a decade.”

    “If the price of gold stays stable at today’s levels, gold stock valuations would have to more than double to bring it in line with the historical average since the early 1990s.”

    Apr 11, 2023 11:04 PM

    Good interview guys. I liked “5 years early” from Cory. Good one. Looking to tomorrow … I think it is CPI day. My bomb shelter is full of cheetos and queso. Bring it on.

      Apr 11, 2023 11:02 PM

      Haha! Yep, we had a good laugh when Cory mentioned some folks were 5 years early. 🙂

      However, I’d point out that again, this is a blanket assumption and a misnomer that people all bought high 5 years ago and never bought dips or sold rips along the journey. There have been all kinds of tradeable rallies since 2016, and even before then, where traders needed to be nimble, but there were plenty of 2-6 month rallies to make some fantastic returns.

      For example, my best personal returns ever, were buying up all kinds of resource stocks during the pandemic lows in March of 2020, when many were cowering in cash and fear… As a result of the runs we saw in Lithium, Uranium, Silver, Gold, Nickel/Palladium, Copper stocks etc…. then by June of 2021 I’d seen a 400% increase in my portfolio off it’s lows…. and it made an all-time high valuation. That was just 2 years ago for goodness sakes!

      Now granted some of that big move higher was earning back some prior losses or sideways markets from the extreme crash the preceded it, and in some of those commodities a tough year or two before hand, but that happened smack dab in the middle of the last 5 years.

      So the point being…. to paint the picture that everyone has just been sitting in sinking ships this whole time is simply not true and was not everyone’s experience or reality. Sure, there are people that did that, but I’d submit that they likely shouldn’t be in resource stocks, or in the commodities space, or possibly even managing their own money. These markets have consistently needed to be traded for gains ever since the PM bull market started in late 2015. So whether it was 2016, 2017, 2018, 2019, 2020, 2021, 2022 (which was a particularly vexing year), or so far this year in 2023, the dips needed to bought near technical support, and the rips needed to be sold near overbought resistance.

      I think Dave Erfle made a good point though in this interview that for over a decade it’s been a “trader’s market,” and not a “buy and hold market.” He feels that moving forward, if we are truly in a new secular bull that is breaking out for the next 2-3 years, that investors will be paid to be right and sit tight, so that would be a big change in tenor for the whole sector, and buy and hold may actually pay off for a period of time.

      Still, while that may be the case for the next 2 years, commodities in general, have ALWAYS been a traders market, where there is cyclicality and volatility in both the underlying commodities and with the individual resource stocks. It has always been like that in the PMs, or Oil, or Nat Gas, or Lithium, or Copper, or Nickel, or Uranium, etc… There are periods of time where the markets are very inefficient and the valuations get comically low, and then there are frothy periods where the markets get way out over their skis and are very overvalued. Rinse and repeat…

    Apr 11, 2023 11:04 PM

    Cory keeping it real.

    Apr 11, 2023 11:00 PM

    With all due respect buying 5 years ago was not too early. 2018 offered great opportunities in gold, silver and their miners. The whole sector was up significantly and in some cases massively in the 2 years that followed.

      Apr 11, 2023 11:11 PM

      I buy in all weather so I have been buying for over 20 years. The hard part is getting long term gains. I had/ have both LT gains/losses in Theralase and Emo, but that is about it. I have been waiting for a longer bull market than a few months, but doesn’t happen. … or isn’t allowed to happen. I am a total cynic on markets.(In and out, over and over.)

        Apr 11, 2023 11:15 PM

        Stay a cynic on markets but get ready for the best gold-silver bull since at least the late 1970s.

      Apr 11, 2023 11:29 PM

      Agreed Matthew. I just saw your comment here, but if I’d seen it earlier, I would have posted my comments above down here under this thread.

      The fall of 2018 (October/November) was actually a great time to be accumulating, into the Q1 run of 2019, then again in the spring of 2019, then again during the pandemic crash of March 2020, and on… and on….

      Heck for that matter there are still plenty of stocks that have never come anywhere close to making lows near their 2016 levels, including the PM ETFs like GDX, GDXJ, SILJ, etc… There are positions I was picking up in 2015 and early 2016 that have remained in the green ever since then, so was that “too early”? I think not….

      The problem is that most investors repeatedly fail to “buy low.” By the time most investors finally got the gumption and check on their emotions to finally buy in 2016 or 2019 or 2020, it was long after the metals and stocks had already been ripping higher for some time. This will never change, and is not exclusive to resource stocks. It was absolutely the same with the Growth Tech stocks, “Stay At Home Stocks”, “Meme Stonks”, Biotech/Vaccine stocks, Cannabis stocks, Cryptos, NFTS, SPACs, etc….

      Most investors did not buy low, and instead piled in after the big gains had been made, so they could take their place as the proverbial “bagholders.” It has always been that way with investing in volatile speculative sectors, and always will be that way. Most investors are not contrarians, do not use technical analysis for entries, and do not want to buy when there truly is blood in the streets…. That is because most investors are herd animals and momentum traders as best, or lemmings running over the edge of a cliff at worst buying into the frothiest levels when it feels good to be investing.

      We’ve seen the exact same thing play out in Lithium recently, where the time to have been getting positioned in most of the old leadership was 2017-2019, and definitely by the spring of 2020, and many of the big names of old topped out in 2021 and haven’t made higher highs. Sure there are a handful of cult lithium stocks that have moved big since then on new narratives, but the reality is most investors piled into the Lithium sector over the last year, and didn’t get into even the new cult stocks until they were up 5x, 10x, 20x already, and then got all distraught when those stocks turned down sharply from their highs…. as all overblown stocks and sectors eventually do.

      It will be the same thing in PMs on this next move higher. We’ve already seen it play out this way just since last summer where the time to have been accumulating PM stocks was in July, and then again on the further dip down in September at the lows in the mining stocks. Now the ETFs are up 60%-70% and many individual names are up 50%-200%+ and NOW investors are suddenly getting encouraged and deciding to get positioned…. It’s tragic comedy, and it plays out like this every time.

      Regardless of investors failing to capitalize on trade set ups over and over and over again, it is always dangerous and a bit of an exaggeration when people proclaim that it was “too early” or “too late” over many timeframes. It makes it seem like there was only one experience someone could have… to lose money. Anyone that has studied the markets for more than a hot minute knows the markets moves in both directions and there are always trade set ups…. every month, every quarter, every year, and especially over 5 years or 10 years etc….

      Apr 11, 2023 11:19 PM
      Apr 11, 2023 11:32 PM

      +1 nice. Silver has done so much better than most people, (and even most guests we’ve had on the show) have given it credit for.

      To have moved from $17.40 in early September, to now $25.54 on the Silver futures prices, is not just a blip…. it’s not just a dead-cat bounce, and it was a much larger percentage move than Gold made. Still most people for months have said they were excited about gold but more concerned or less interested in silver. Once again, the stealth rally in silver has gone underappreciated as it has over-performed.

      Apr 12, 2023 12:44 AM

      Silver is approaching the February-April 2022 high range of 26.93-26.22 which closely matches FIBO resistance levels of 25.90 and 26.42 (using BullionVault spot). Today’s CPI and FOMC Minutes may influence near term movement, but a non-linear break at any time these days is possible – most likely northward.

    Apr 12, 2023 12:47 AM

    SOLD 30% position — AG @ $7.78

      Apr 12, 2023 12:24 AM

      I’m glad after reading articles on Tearlach ( TELHF) and their optimism with Blackrock Silver, I dipped my toe in Apr5 & 6 @ $.184 & lower. Today $.39+

        Apr 12, 2023 12:26 AM

        Correction : @$.29 US

      Apr 12, 2023 12:00 PM

      Jeff Clark made a presentation at an on-line conference at Adam Taggerts Adam later released it to do follow-up sales of the conference. In that now “free” presentation, Jeff Clark mentioned over 20 miners he is positive on and the 3rd one up being AG First Majestic. Just go to and scroll through recent presentations.

        Apr 12, 2023 12:51 PM

        LakeD, I heard Jeff C, stressing AG’s potential 30 million AgE oz. I hadn’t owned AG for a while up until AG’s closing down J. canyon. I had bought 3 K shares @ $5.60 on that downdraft day, so selling 1K @ for a $2.16, a near 38% gain gain made sense.
        Anyway, thanks for the Alert. I’ve been at it in the metal shares since 1998, thanks to Jim Puplava and David Morgan, and in the metals since 1976-77.
        The game is still about taking profits for another day and establishing loss reduction parameters, and reminding oneself continuously about those parameters

    Apr 12, 2023 12:56 AM

    Taking some profits this morning, silver price is back under their control, look away look away, nothing to see here in the pm markets… fake out…

      Apr 12, 2023 12:30 AM

      To be clear, I am thinking only short term here…

      The BOC had Tiff make their statement today, more of the paraphrasing; “we are ready to raise if…”, and nothing about lowering the rate until next year. Kinda like the climate mantra of, “man made carbon dioxide…”

      This has become a psychological event as much as a banking event.

      Apr 12, 2023 12:22 AM

      Hmmm…. Dan I show Silver futures up on the day to $25.61, so if “silver price is back under their control,” it appears “their” bias is for higher prices…. I’ll take it I guess…

      As for the PM mining stocks, it’s a mixed bag overall, but with a slightly bullish tilt and more green on the screen than red overall on most of the watchlists I see, in the ETFs, and in my portfolio.

      Seems like a relatively constructive day overall, but I’m reviewing things to see if I should be trimming back any continued movers to the upside. It’s an odd place to be but overall, I’ve not been trading as much over the last few weeks and have just been letting the winners run, and as most stocks have been continuing to rerate higher, I’ve just been in a holding pattern with the stocks in my portfolio, and seeing how things develop.

      It’s nuanced, but in general I agree Dave Erfle’s point, that moving forward, there won’t need to be as much trading required as over the last decade, because we are in a new general uptrend. As a result, for many positions, just holding them versus overtrading them and getting out of position is a more fair vantage point to have over the next year or so.

      Having said that, as more of a short-term swing-trader and medium-term position trader, I’ll be looking to buy on weakness, and trim into extreme strength. It’s just that in bull market, overbought conditions can last longer than many are expecting, especially compared to the reverse of that in a bear market conditions where oversold conditions can last longer than expected. My point is that theses are cyclical and volatile sectors, so there will always be good trade setups, but personally, I’m slowing my roll a bit now that we are out of the danger zone… and want to let some just climb for a while. I’ve trimmed off some higher flyers to raise a bit of capital for buying pullbacks, but am mostly just staying put and riding what I’ve already positioned in last year.

    Apr 14, 2023 14:24 AM

    When Erfle comes on and starts talking buy and hold LT bull in PM stocks, its time to sell. Sure enough massive sell off today. Trimmed the sale on a couple of big winners before the bloodbath.