Dave Erfle – Technical Outlook On Gold, GDX, GDXJ, Silver, And the PM Juniors
Dave Erfle, Founder and Editor of the Junior Miner Junky, joins us to review the technical setup in gold, GDX, GDXJ, and Silver, as well as the health of different segments and stages of the PM equities. Dave wants to see a decisive close above $2100 to signal that a true breakout is in order, but also mentioned it may take a move up higher to a $2500 target to really get some upside momentum going in the junior mining stocks. We get into a lot of different nuances of investing in the precious metals equities, the cyclicality of the sector, and where Dave sees the biggest opportunities moving forward.
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And what are western governments doing with all that cash…the Aussies are spending billions on new submarines. They are also scrapping their total fleet of helicopters and likely replacing them with American models. One retired general said there was nothing wrong with those helicopters.
In addition, other mayors in our cities are looking at what is happening in Toronto and many of them want to see the same thing for their city as well. They cite the increase in property values over the last 20 years and state we too need an increase in property tax revenue. The snowball that is rolling down the mountain is becoming an avalanche. DT
These discussions with Dave and others on the channel, frankly, are getting very repetitive, and very old. This sector is trash, and I wish I hadn’t spent three years and significant losses waiting for some type of magical reversal in fortunes.
Wow. Thanks for such a substantive post that offered such value to readers here… (good grief)
> If you don’t like his interviews, then it’s easy…. just don’t listen to them. (there… problem solved).
>> It does little to help others or yourself though to come on here and whine about your misfortune, and then say the interviews are very old and call the whole sector trash. That is an emotional dump and serves nobody, with no payoff.
Sorry to hear about your losses, but waiting for a “magical reversal in fortunes” is not a winning strategy (or a strategy at all). There are some people that should not be managing their own money.
At least Dave Erfle’s interview today offered listeners technical support and resistance levels to watch in the metals and mining ETFs, as well as his insights for trading this sector as a seasoned PM investor for decades. We sure appreciate him investing his time here to help educate investors, and freely offering information and strategy for consideration.
Admittedly, some macro drivers and narratives in Fed policy, interest rates, etc… haven’t changed much for months, and so the overall thesis may come across as somewhat repetitive, but that doesn’t make them wrong or old. Until something big changes, that really shakes things up, then there aren’t going to be radically new ideas or strategies to deploy in anyone’s interviews.
Sure, it has been a tough market the last 3 years, and the PM stocks had a bearish overall trend if you conveniently go from peak to trough in a straight line. However, that is flawed thinking, and assumes everyone got positioned at the peak and then just sat around like bumps on a log without taking any evasive action, or buying oversold dips, or selling overbought rallies the whole time… That is not reality for anybody with a clue.
Most savvy resource investors were not buying at the top in August of 2020, but rather they were trimming positions back and selling. We sure discussed that PLENTY here on the KER while it was playing out. I had posted a number of times in late July of 2020 that the BPGDM had been buried at the upper extreme reading of 100 for several weeks, and that it was time to start harvesting gains (not initiating new positions). If people were actually buying into full positions then into those frothy conditions, and then didn’t take any further action, then yes they likely are bagholders today. Additionally, those people shouldn’t be managing their own money, because they do not understand the basics of buying low or selling high.
It is also a complete fallacy not to mention that there have been a number of tradable rallies the last few years. Those that understand the commodities and resource stocks are volatile, understand you don’t just sit in these stocks for years, and that is about buying/accumulating corrective moves and then selling/trimming bullish extremes.
The whole point is finding opportunities in the volatility. A whipsaw market provides plenty of trading opportunities for those paying attention. Of course, people waiting for magical reversals fail to mention those setups for gains, that came and went, and passed them by.
>>> For example, just in the last 3 years since that peak in August of 2020:
1) There was the PM stock rally from the tax loss selling season in Dec 2020 into the Feb 1st 2021 #SilverSqueeze run, where many of the dual-listed silver and gold stocks had big runs of double-digits. (that isn’t trash)
2) then there was the 3-month rally from March to June in 2021 with big double digit moves higher in the PM stocks. (that isn’t trash)
3) Then there was the PM stock rally from the tax loss selling season in Dec 2021 through the March 2022 period on the typical Q1 run that then was spiked with the Ukraine invasion. Again more double-digit gains in just a few months. (that isn’t trash).
4) Or how about the 7.5 month rally from the bottom in Silver and the PM mining stocks in Sept 2022, through early May of 2023 at the conclusion of the banking crisis?
That was plenty of time to catch at least some of that move for anyone remotely paying attention, even if they didn’t nail the bottom or top and some stocks were not just up double digits, but even triple digits. (that was not trash).
Dave Erfle, as well as a number of other KER guests here pointed out this move higher repeatedly in real time, as it was playing out, for those that had the ears to listen, and took appropriate action. (of course, many didn’t and prefer complaining)
5) Heck, even recently we saw most quality gold and silver producers and larger developers bottom last October in 2023, and rally up double-digits into late December for 2 months. My whole portfolio rose about 24% during that time period, with a mix of outperformers and underperformers… but the trend was clearly higher in the quality gold and silver names. (that was not trash).
If you really think the sector is trash (after missing 5 different periods for outsized tradable rallies in the last 3 years) then sell everything, and invest in a different sector. Complaining about it serves nobody.
Here is a chart of GDX since the peak in PM stocks in August of 2020 to present.
It’s easy to see the many times GDX rallied in a big way over the course of the last 3 years. There were plenty of trade setups for those paying attention and actively managing their portfolios. I’m not saying it was easy or that everyone did it, but the opportunities were there. It was clearly not a runaway bull market with momentum the whole time, but the trade setups were there. People like Dave Erfle pointed them out each time on interviews here on the KER, just like he did again today.
With all due respect Ex, that gdx chart since pandemic you posted confirms that rather that gold sector equities have been underperformers for the entire period in spite of repeated self serving calls of outperformance, multi backers etc etc vs the general market. Where as measured by spx on this site it’s been absolutely the opposite to this day where spx, ndx are making new highs and most gold equities are in the gutter once again.
No doubt as with your often repeated buy every low and sell every high strategy during that time frame, which you know claim such success, there is little doubt we are likely to have another one of those opportunities in order to get rich as they’re oversold while gold holds above 2k.
Provided of course you’re not holding the bag and already fully invested as proudly claimed by the gold bugs
Jonsyl, you misunderstood the point of the chart I posted then. The point was never that gold equities outperformed the S & P 500 or NASDAQ or DOW.
Let’s be crystal clear here though… I never made that claim or insinuated that gold equities outperformed general equities over the 3 year period referenced, so I’m not sure why you’re conflating the 2. Sure there were a number of 3-7 month runs where PM equities outperformed the returns in general US markets, so there was money to be made… but again, was not the point.
The point was that not all of the PM mining sector was as ugly as some of the juniors, and it was definitely not trash during the last 3 years if there were 5 big double-digit to triple digit rallies to cash in on for traders positioning with the technical trends.
Another pointt that seems lost on some people here is that one doesn’t have to catch the exact bottom or top to trade those oversold rallies into overbought conditions and make money.
Since you asked, yes I did catch a lot of those rallies and posted about buying and adding to positions during tax loss selling season in 2020 and 2021, as well as adding big in the spring of 2021. I also posted a number of times about adding to positions in both the July and the September of 2022 areas of insane valuations (when ole’Joe that you championed at the time was advising people to sell everything and go to cash right before a huge 7-8 minth rally in the PMs)
I never stated or implied that I did so with a 100% of my portfolio, and never advised others do so… but again that wasn’t the point of the GDX chart posted. The point was to clearly show 5 different periods of outperformance in the gold stocks that could have been traded by anyone here, despite all the bellyaching we keep hearing about how bad the gold stocks have done the last 3 years.
We bring all these technicians on here to share the key levels of where individual sectors, ETFs, or stocks are oversold or overbought. In each case of aforementioned PM stock rallies, ourshow guests came on and pointed out support levels to watch for to buy or add positions, and resistance levels to sell or reduce positions.
If people listen to all those segments we produce about the setups on the charts, and then fail to spend the 10 seconds necessary to place trades, then that is on them for not taking action. Why review any of the info on short or medium-term levels at all if one isn’t going to utilize the data and insights shared to make money or become better investors?
If people are just going to plop some money in a handful of PM stocks one time and then take no further action, then the vast majority of the information shared in the interviews, be it fundamental macroeconomics or technical analysis for trading isn’t really germane or of any value.
However, that exact issue does account for why so many fail at investing. It ultimately takes assessing the setup and then taking action. Why in the world woukd anybody spend their time listening to any of these interviews, or analyzing charts at all if they aren’t going to place an appropriate trade and take action?
Hi Ex, you aren’t being tolerant of Mark Gordon’s post. I know you work hard to provide inciteful commentary, but tolerance is another matter, all the poster is doing is expressing his opinion which frankly should be welcome as an alternative point of view. He wasn’t nasty or disrespectful of your guest and you should understand that.
I for one called out another poster recently who was clearly out of line when he attacked this same guest, and it caused the comment section to be shut down. You usually see both sides of a story with clarity this time I felt you were off the mark. (no pun intended) DT
DT – You’re entitled to your opinion just like I am. Personally, I don’t have much tolerance for someone that comes on and offers no value in their post, only to whine that the sector is trash, that they shouldn’t have invested here for 3 years sitting on losses, and disparages the interviews we work on hard on slamming them as getting repetitive and old.
I’ve never understood why someone feels the need to come on a take an emotional dump on the forum complaining about the interviews. Then just don’t listen to them or offer some constructive feedback on what you’d prefer to hear for content. Make a contribution if you post, not just cry about the state of things. The last interview with Dave had about 1,500 listens across our website, podcast network and YouTube, and we’ll probably see close to that many on this one. Stating the obvious — most people are finding value in them. What were the takeaways from Mark’s post that helped investors in the slightest? Whining helps nobody.
In contrast, my response back had plenty of value for those with the eyes to see it, and demonstrated why Dave Erfle’s post had present value in the technical targets he shared, and demonstrated 5 different periods in the last 3 years where there were great double-digit or triple-digit gains. If people missed all those rallies, simply buying the top in the summer of 2020 and then holding on and doing nothing the last 3 years, then maybe they shouldn’t be managing their own money.
Marc, can you please dial it back with the name calling and insulting the guest we bring on the show?
The whole point up above with the other Mark, was about not just coming on here and doing emotional dumps that don’t serve investors here. Again, the spirit of this forum is an exchange of ideas where people actually post content that helps other investors. Sure personal opinions are fine, and clearly you don’t like newsletter writers, but a great question is does my post offer any value and help other KER community members?
I certainly am not attacking Mr. Erfle; his newsletter is thorough and is a great value. I was expressing frustration at the same general themes regarding precious metals and lack any sustained recovery/performance in these stocks.
Hey Excelsior-Having a bad day pal? Your response and its tone was inappropriate to say the least. Chill, dude, and take your medication.
Mark spare me the BS. You came on here and whined about the interviews with Dave being repetitive and old, said you wished you’d not been in the sector for the last 3 years, and were waiting for a “magical reversal” and that the sector that you stated was “trash.” How is that a contribution to anybody?
It was simply an emotional dump and none of that had any value for anyone else here. If you really feel that unhappy with the content, then just don’t listen to those interviews, cash out your PM stocks, and maybe have a professional manage your investments moving forward in other sectors.
Look guy, to end your post with “take your medication” is way more out of line than anything I responded back with, and shows your true colors. That was also not a contribution to the community here or a value add.
In contrast, my response to you back had PLENTY of value embedded for you and others if you had the eyes to see it. I pointed out a few reasons why Dave Erfle’s post also had value providing new technical levels and fundamental trading insights. My post had a lot of additional substance where I demonstrated 5 different time periods, just in the last 3 years, where there were great double-digit or triple-digit gains (so clearly the sector is not trash, but does need to be traded).
If people missed those series of 5 tradable rallies over the last 3 years, but rather got positioned at the 2020 summer top and then sat there doing nothing, then maybe they shouldn’t be managing their own money. It is fine to be disappointed with performance overall in a sector or stock but whining about it publicly is not a value add to anyone else, and ignores that there were plenty of opportunities for those paying attention.
> I also provided a chart showing all these GDX rallies clearly for anyone that pulls it up. That is offering value in a post, versus just an emotional dump on the forum.
This forum is for an exchange of ideas, and it’s fine to disagree, but it not for whining that interviews are boring (with no real constructive feedback or suggestion), or that the market is trash or that we wish the markets were easier. The posts are for sharing actual information to help other investors… which your post had none of. Hopefully that clarifies why I responded as I did, and the content shared within my response which was aimed at helping investors here.
Hi everyone, can we please move on. Many of us are a bit disappointed in this sector.
Marc, I’m very sorry you find some of these interviews repetitive. I do as well sometimes when not much changes in the market. All we wanted to highlight in this interview were a couple chart levels where GDX and GDXJ could bounce from. Unfortunately there is not much more to honestly say about the sector.
I also have lost money in this sector, especially over the last couple of years. I am not a good trader, nor do I have the time to trade. I too wish it was an easier market.
I will keep this comment board open as long as we can move on from attacking others.
Thank you everyone!
Cory
$3,200 Gold- How The U.S. Debt Trap Could Get Us There
Lear Capital
“Across commodities, for the second consecutive year, the only structural bullish call we hold is for #Gold and #Silver.”
– Natasha Kaneva, Head of Global Commodities Strategy, J.P. Morgan, Jan 17, 2024.
From Dystopia to Utopia in Gold & Silver
David Brady – Sprott Money – January 18, 2024
“We’re finally approaching the lows in Gold and Silver, which will coincide with the peaks in the 10-Year Yield and the DXY.”
“The Banks are racing to cut their short positions in the precious metals. They cut their net short position in Silver by 50% last week alone.”
“Sentiment is falling to bearish levels consistent with prior major lows. The same goes for the RSI. As for the 10-Year yield and the DXY, they have been in lockstep since December 11. Both have also been almost perfectly inversely correlated to Gold…”
Status of Gold’s Bullish Cup & Handle Pattern
By Jordan Roy-Byrne CMT, MFTA • The Daily Gold – January 17, 2024
https://thedailygold.com/status-of-golds-bullish-cup-handle-pattern/
Cup and Handle……..has a rather long extended handle…. even the handle has a small cup pattern… 🙂
Thanks for explaining The Cup and Handle Theory, I always was amazed at what it represented or didn’t represent, now I know. Time for my morning “Jo” also known as the cup and handle drink. LOL! DT
Bluestone killed it yesterday
FREAKY FRIDAY AGAIN……………………….. 🙂
Ti-Bitch, you should try to restrain yourself it’s not good for your heart health! LOL! DT
Ti-Bitch, you must be a rippling specimen of male testosterone, I bet you jump out of bed in the morning in your boxers run down for a quick dip in The Rideau Canal and then head home to your juicer! LOL! DT 😉
This is a pathetic exchange. Swap emails so you don’t involve us.
DT & Marc. Please stop the insults back and forth and the name calling, or the posts will start being scrubbed, which we don’t want to do.
As has been stated about 3 times now on this thread… the posts here are for sharing content with other investors here that serves the community, or sharing ideas that help investors. The question after a post is did that add value or contribute? The back and forth name calling are not a value add guys.
Please, can we get back on track with discussions about investing and the markets?
Dave:
Geeezzz…Thanks for coming back on a routine basis and giving us your thoughts on the past and future of the markets. It is difficult times and you should be commended for your contributions to those of us on the Kereport that are on the edge of our seats waiting for the markets to turn. I always beat a dead horse but firmly believe it is Fed and Wall Street intervention that causes people to have difficulty predicting the future as the interventions are not consistent with traditional fundamentals. Although there are attempts to “predict” the future based on past history, the glitch or variable we are having difficulty getting a handle on is that current algo and computer programs can be altered by “humans close to the system or AI created by humans close to the system” that are contrary to fundamental and technical analysis. This, of course, brings high level of frustration to investors as they see there is NOT a level playing field. It results in slaying all the messengers and kicking all the dogs as we don’t have access to the perpetrators of the dysfunctional markets nor do Regulators try to level the playing field, when they are paid by investors to do so.
Anyway, that is a long winded way of saying: Dave, thanks for all the wisdom you provide on a weekly basis to all of us on the Kereport.
My above comments are meant to include the problem of unregulated shorting, naked shorting, naked shorting without covering, front running, lack of fiduciary responsibility, tax breaks, accounting rule favoritism, Glass Steagall violations (since eliminated), definition of an investment bank for access to the Fed and Citizens United making a corporation a person for deferring criminal responsibility and allowing unlimited donations to politicians so they no longer respond to the people. I should add the appeals courts that are filled with conservative judges that rule for corporate interests. That’s just a few.
Thanks for that post Lakedweller2. We sure appreciate Dave coming on and sharing his information with listeners here big time. Again, some of the larger macro themes haven’t changed much, so there are certain fundamental and technical inputs that people just need to have patience on seeing how they resolve. Personally, I felt Dave offering key technical support/resistance levels, and his insights for trading the PM stocks after several decades of experience was a big value add to the community here.
Yes.
uup daily….little correction on very low volume….strong technicals in place…The .382+ 50ema retrace is way above…the 200 ema is above that at 28.61….buying gold and miners is no slam dunk…however the gdx thing is set up for a bounce technically…with slow stochs crossing positive on intra-day charts w oversold situation..glta
the technicals on UUP are a bit too strong for my money…https://tos.mx/Hg1x7Ss
When personal attacks take over a thread it is time to shake yer stupid heads. You complain about politicians having smoke screens and diversions to mask real problems and that is exactly what you two are doing on this board, it is a colossal waste of time for everyone.
My apology Ex for my deleted comment but it was direct on purpose to get these two’s attention.
We have other problems… TSX.v
All good Dan, the system flagged it due to the F-bombs in it, but I understand and agree with the point you were making to DT and Marc, which is let’s get back to sharing good content on the markets or investing, and cut out the back and forth name calling and insults. It’s a solid point my good man.
We are running out of January and this does not bode well for silver… Gold:Silver ratio:
https://goldseek.com/chart/gold-silver-ratio-24-hour
IMO whichever way this breaks out will guide where silver goes for awhile.
Gold:Silver ratio: weekly
I liked the link that Irishtony posted the HH thread, India is stopping tarrifs on pre- industrial silver imports… that should make a bit of difference too.
Glad you separated the Mining section from the ORPHAN SECTION….. 🙂
Good One, Jerry! LOL! DT
New all time low plus best holdings the target. Obviously no qualitative variables in the equation unless they are reverse correlations from logic.
Currently listening to a discussion between Andy Maguire and Allister Macleod on Live From The Vault. It was added to YouTube today. Very good information.
A lot of people think that inflation is under control, in Canada we are seeing inflation pick up everywhere, inflation refuses to co-operate with how the government wants it to behave so they can issue rate cuts. I’m sure the same is true for Americans south of the border their gov’t spending is as well out of control. Two months ago, we got a new socialist mayor in Toronto, and she is introducing legislation in February to increase property taxes by 16.5%, that is on top of a property tax hike last year of 7%. (Way beyond the Statistics Canadas inflation figure of 3.4%) Instead of reducing the size of government they are increasing it exponentially. A 16.5% property tax increase is spending gone mad. DT
https://twitter.com/davos2024/status/1747400930985660571/