Dave Erfle – Powering Through This Precious Metals Consolidation With A View Towards The Big Picture
Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us to review market reactions to recent macroeconomic news, and how to view this consolidation in the precious metals sector. We start off looking at how the deluge of information last week included regional bank concerns, central bank rate hikes, and a stronger than expected jobs number, but morphed this week into lower inflation readings, and the expectation of the coming Fed pause to tightening and worries about a contracting economy.
We looked at how all of that financial news has moved pricing in gold, silver, and the underlying PM stocks and what technical support levels are key to watch. Dave also shares key considerations for how he is approaching investing in gold and silver stocks in the short to medium-term, within the context of a big picture outlook that precious metals are going to break out to new highs as this larger bull market unfolds.
Gold’s last 6 weekly closes have been higher than all others in history except for one (in 2020). Something tells most don’t realize just how strong gold has been.
Even if gold chops sideways from here for months it doesn’t necessarily mean the gold miners won’t have a good time. Just compare the present to 2016…
Another 2-3 percent drop tomorrow for SLV could be perfect for a low and reversal…
Big (fear-induced) gaps above should give buyers some confidence.
Pacwest shares will probably get hammered tomorrow just in time for The Fed and The FDIC to intervene on the weekend and declare insolvency and hand any valuable assets to Wells Fargo or some other big Bank. It’s all rather convenient.
I just hope all the gold bullion is still stored safely in Fort Knox because they will need to have it audited to prove it’s actually there and use it to back their digital currency. If it isn’t, a shot it will be heard around The World. DT
PacWest has been getting hammered since 30 minutes after Jerome Powell stated we could draw a line under the banking issues with JP Morgan’s takeover of the insolvent First Republic Bank in their sweetheart deal. No sooner had the “all clear” been given by the Fed head, then PacWest reared it’s head, along with Western Alliance and First Horizon.
PacWest was also hammered pretty good just today….
PacWest Stock Plunges 23% After Losing 9.5% Of Deposits Last Week
Dan Fitzpatrick · Yahoo Finance – Thu, May 11, 2023
“Regional bank stocks fell again Thursday after troubled California lender PacWest (PACW) disclosed it lost 9.5% of deposits last week on a wave of new pessimism surrounding the industry.”
To your point though DT, there probably will be some larger bank that swoops in to take them over while there is blood in the streets….
Just like UBS took over Credit Suisse…
Just like JP Morgan took over First Republic…
Just like First Citizens Bank took over Silly-Con Valley Bank…
Rinse and repeat…
HA,………….. Ft. NoKnoxs…………. trumpster’s treasury minnynuchy stole the keys
The Canadian dollar was rejected at important resistances one of which is the falling 50 week MA which it touched and pierced for the first time in 48 weeks.
SLV:GLD has nearby supports that could easily mark an important low. Remember that some of the most convincing and violent moves are the ones that go against the dominant trend, i.e., corrections.
GDX:SPY has challenged important fork resistance 3 times in the last 5 weeks and failed 3 times. This now significant history adds to the importance of the resistance so we should be ready for impressive (bullish) action once it is overcome.
Uranium’s April Breakthrough
Jacob White – Sprott Uranium Report – Friday May 5th, 2023
“The U3O8 uranium spot price gained 6.01% in April, increasing from US$50.70 to $53.74 per pound as of April 30, 2023. Uranium has posted a healthy 11.24% year-to-date return as of April 30, 2023, and continued to show strength and diversification relative to other commodities, which declined 7.53% YTD (as measured by the BCOM Index). Over the longer term, uranium has demonstrated even greater resilience within the commodity space. For the five years ended April 30, 2023, U3O8 spot appreciated a cumulative 155.92%1 compared to 16.43% for the BCOM.”
“The U3O8 uranium spot price, which has been range bound between $48 to $51 for several months, broke out following the World Nuclear Fuel Cycle 2023 (held in The Hague, Netherlands, on April 18-20). The uranium spot prices reacted positively to bullish comments by China about its plans to grow its nuclear energy capacity (from 5% of its electricity to 18% by 2060).”
(SILV) (SIL) SilverCrest Reports First Quarter 2023 Results
11 May 2023
N. Eric Fier, CEO, commented, “Marking another significant milestone for SilverCrest, Q1, 2023 was our first full quarter of production since Las Chispas was declared commercial in November 2022. We generated $19.3 million of net free cash flow allowing for accelerated debt prepayment of $25.0 million and a robust quarter end cash position of $45.8 million. As a testament to our strong financial position, execution and risk management, subsequent to Q1, 2023 we made an additional debt prepayment of $20 million and have now repaid 95% of our debt within six months of declaring commercial production.”
Now that’s how you launch a new mine… Well done Silvercrest team.
FREAKY FRIDAY………………… AGAIN……………………
Happy trading …….. border open for business….. lol.
This system we now have is built on speculation, the banks which are supposed to promote sound business practices have been allowed to borrow as much money as they want and to speculate with the public’s money. If the banks, make money they keep it if the banks lose money the public is on the hook for their losses. Now with the failure of five big banks in the last two months the system is transparent. Glass Steagall should never have been repealed during the Clinton Administration. When you aren’t responsible for your losses and can’t be held responsible by a regulating authority all H$LL breaks loose.
We are in a Doom Loop: A doom loop is when one negative event triggers another, which in turn triggers a new bad event and/or worsens the first.
The speculative memory is short, it is built on greed. It knows no bounds. If you look back at the last twenty years and beyond, the market participants are comforted by the recollection in the past that every crash has been followed by a recovery, when The Fed printed money and lowered interest rates. Two steps up, one step down, two steps up again, and that every recovery had brought prices ultimately to a new high point. Meanwhile the speculative capital kept rising and destroying sound business practices. Where was the wolf at the door. The wolf had cried but no one had listened, the wolf no longer mattered.
When the wolf no longer matters, the financial system enters a “Doom Loop”, folks we are about to deal with the profligate ways of our recent past. DT
We are now in “The Twilight Zone” This will give us a life where everything is available, and nobody can afford anything!!!!!!!!!!!!!!!
Krell bankers survived. Now squat on earth!
Good commentary……… I would say….
Ditto on the Twilight Zone…
Joe BLOW BIDEN taking the entire world down.
Thanks Jerry, the changes that are happening in our world are too numerous and abrupt, even the electronic devices we use to monitor them can’t keep up anymore.
I agree with Dave, until this index gets out of its’ slump these juniors are going nowhere, Canadians have watched it long enough to know the Bay Street bullies have a field day with investors with stars in their eyes for making millions… easy money for an effing crook.
Although your passive comments are on point, don’t hesitate to express your deeper inner feelings as we are mostly grown ups and can handle it.
But, I am getting to be at a loss what to trade as it becomes more nonsensical every day. I like my stocks but am always looking for a “runner”. Yesterday Theralase looked like there might be a move up based on some news put out a day or two earlier. Hit + 15% or so at one point. I told myself not to fall for it. Today it opened down -8%.
Then today Headwater is showing on “my” Schwab +19%, whereas yesterday it was -8%. Can’t jump on that.
Today Golden Lake is +15% and yesterday -9.5%. No news or nothing on those last 2.
Surge Battery +12% today and was a +2% yesterday, but no news.
Santacruz down -12% again today because of the Canadian halt for their financials. No one has come up with anything showing they should not be still solvent … so that may be a “buy more” for me.
Metallic had some news about Newmont association, but it continues its move down.
These kind of alternating day
movements appear orchestrated and particularly Emo and Magna where both of their drill results over time don’t merit continual walk downs other than they are Junior Explorers and managed money is taking the short side of the trade.
That makes investing in a sector that provides products that are key to the survival of the worlds economic products a waste land of corruption and crime.
I find that distasteful but still an opportunity as even criminals have to take the other side of the trade at some time.
I can hardly wait (sarc.) for SCZ to come out of halt, prolly go no bid, haha… I think the criminals are victims of their own efficiencies, they have successfully chased out most of the sheeple, there is no game until a new mark appears with a couple grand to lose, haha!;-D
I keep thinking there are not enough of them without a social conscience to beat us. Now I think they have us out numbered. We need to find them an alternative hobby like gladiator fighting or sky diving without a parachute.
You talked me into it … I added a few more SCZ but Schwab is getting more and more into a game of “move the goal post”. Just another example of brokerage firms now considering Clients the “Marks”. I bet 87.3% of brokers can’t spell Fiduciary unless they ask their mother’s for help.
You guys crack me up……. 🙂 Some funny stuff, if, it wasn’t so sad, just how corrupt those mothers are… lol.
So on SCZ: Halted Cad: .40, which my phone says is US .30. My OTC buys average .24. If the company is solvent, then my average is 20% below Cad current price. If they provide the financial report and it includes the Bolivia #s and those #s are satisfactory, then they may take the Canadian down to no less than 20% as an average and then as the price of silver goes back up in a bull market back to .40 … I made 20% that I can use to short JPM.
Getting close to the end of my 3rd waiting period on sales of Emo. Won’t say when as I want to buy some back and don’t want the MMs to run price up until afterwards. But, just as a warning to them, I still own some Emo and I will switch to Magna or maybe one of my other Junior Explorers if they raise prices too fast. That is a threat! 🙂
Interesting that the OTC price for Magna went up +19.66% on Friday when the Canadian price is somewhere near -5 to -8% (and no adjustment to o the primary price has been made as of Sunday). Councidence?
No winner for the week in my portfolio except the unknown of Santacruz. The rest have become better buys and are full of pride and enthusiasm.
News from the Contrarian Investor of the Alternate Universe: my portfolio is at an all time low. Nice to know that Gold is near all time high.