Latest / Financial Survival Network / Gold Stocks Regaining Their Glitter with David Erfle #6074

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Gold Stocks Regaining Their Glitter with David Erfle #6074 · Financial Survival Network

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The largest gainer in the S and P five hundred by far on that day,
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while the Dow and the S and P were getting their ass added to
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them, So that put gold stocks on the radar. I think for the
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general investor and these funds. Now, if once Q two comes out and
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we have another blowout core when you're going to I mean, like I said,
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the gold prices averaged over twenty three hundred dollars here in Q two,
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Unless you know, gold falls out of bed for some reason in the next
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moment, it looks like it's going to average over twenty three hundred and Q
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two. You're listening to Carrie Let's's Financial Survival Network, where you get valuable
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information you just can't find anywhere else to thrive in today's trying times. You
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need the Financial Survival Network now more than ever. Go to Financial Survivalnetwork dot
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com and get your free newsletter and gift. Financial Survival Network now more than
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ever. And well, you are listening to and watching the Financial Survival Network.
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I'm your host, Carrie Lutz. Well, gold has been blazing hot,
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same with silver. Today silver is over thirty two bucks an ounce.
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We're just a couple more days left to go in May, and will the
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junior miners shortly follows suit. That's the question. Our good friend David Earthley
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is with us now, and of course you know his site very well Junior
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Minor Junkie dot com. And if you've got a question for David myself,
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shoot me an email kl at Carrie Lutz dot com. David, Hey,
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it's great to connect with you. It's been a while. A lot's been
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going on here. Hey, Kerry, great to see it you too.
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Man So Bryce a goal, you know, twenty four hundred right now,
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it's start attacking it. Today is a twenty three thirty something whatever, it
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doesn't really matter. At this point, we had to close over two thousand.
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It's never looked back. Now we're looking at a potential monthly close for
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silver of thirty two or higher. Yeah, it's interesting, you know.
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Once we've had, once we had that thirteen year cup and handle breakout in
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the gold price above that twenty twenty one hundred level, which had been resistance
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for thirteen years, the gold price has taken off like a scalded cat.
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Once we had that technical confirmation when we had a monthly close above twenty one
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hundred at the end of March, and it was also the end of the
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first quarter. So yeah, and now silver is appearing to do the same
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thing. At thirty dollars was resistance for quite a long time, and it
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looks like we're going to have a monthly close above thirty this Friday, which
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would be a technical confirmation of a breakout in silver. And all this was
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foretold by both the miners and silver outperforming the gold price over the past few
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months. And what's more important is the silj which is the silver junior et
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F that's been outperforming not only the miners, the gold miners, but it's
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also been outperforming gold. So we got so we have the silver junior et
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F outperforming the miners, which are outperforming gold and the gold price. So
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it's it's it's very bullish here for for the precious metal sector. While this
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consolidation is taking place in gold, and you have silver continuing to show this
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this relative strength. And more importantly, you take a look at the gold
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silver ratio. That eighty to one level has been a level to watch for
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quite some time, and now it's now it's trending below eighty. I think
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it's around seventy right now. So you see that, you see that going
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down. That's very bullish for the sector because silver, well, once the
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gold price breaks out and takes off, then silver joins the party and that's
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when you got a full blow bullmark market in the precious metals. All right,
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So in your expert opinion, since we're for gold anyway, we're heading
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into uncharted territory. Silver is still trading just around two thirds of its all
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time high. How high can these metals go? Oh? Well, you
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know, I don't like to make broad forecasts, you know, for the
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future that much. I mean, I'd be very happy with a thirty dollar
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floor in the silver price, along with a twenty dollar floor in the goal
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price, which we already have. But if you take a look at technically
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at the silver price, if we get that monthly close above thirty two dollars
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this Friday, there's not a lot of resistance until thirty four to thirty five,
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and I wouldn't be surprised to see that that level scene visited rather quickly.
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We had a short squeeze going on in the copper market, that is
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that is subsided, and now it's transferred into the silver market. If you
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take a look at at Chinese demand, Chinese central bank demand, citizen demand,
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that's what's driving the market right now. I mean, if you take
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a look at the premiums in silver and Shanghai, they're at twelve and a
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half percent the premium physical silver and Shagai and the gold premiums are at over
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two percent. So that's what's driving the market here is Asian demand. And
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Indian physical demand is really picked up recently also, so you know, because
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you you know, gold is reigned supreme in India, and when the gold
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price it has become too expensive, they start buying silver. And that's what's
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happening in India. Barman's gold. And we're coming up to the marrying season
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in India, the dowry season, and that's when things generally really have taken
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off in India in the past, so right, and there's also election going
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on there too right now. So yes, a lot of interesting things happening
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in India. A lot of elections taken place all over the place and leading
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to the general feeling of political geopolitical instability. We got wars going on,
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not just the two wars that are announced, but other wars that are a
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little more stealthy. It seems like everyone in the world wants to kill each
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other. Unfortunately, yes, that you know, that's that's the that's the
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perfect storm for the for the precious metals here unfortunately. You know, as
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far as the geopolitical situation concerned, that's that's keeping a solid that's keeping solid
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buying and in both silver, in both silver and gold. Now, inflation
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is not waning, taxes are rising, America's debt burden is off the charts
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now. It's that the pause I scheme, that is that is uh,
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the the basically the federal Reserve and the US government is in full force now
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with a trillion dollars of debt being added every year now and it's I think
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every hundred days, three hundred days, every one hundred days, a trillion
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dollars of debt is added and there's no intention of paying it, paying any
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of it off. There just can can continue going to going to finance old
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debt with new debt. And the gold prices sniff that out. The gold,
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gold and silver both are breaking out in all currencies. You know.
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That's what it took for the gold price to finally becoming into a bull market
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was was for the gold price to break out in the US dollar, which
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is a world reserve currency still, and that's that's taking place. So you
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know, you've got the wars going on, You've got the the inflation situation
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which is which is basically creating a stagflationary situation. That's what gold sniffed out.
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Also, you know you've got you've got inflation higher than the than GDP
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growth. We got another GDP number coming out tomorrow and then a PCE inflation
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statistic coming out on Friday. That's the Fed's preferred measure of inflation. And
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we know, we know those aren't real inflation statistics. Anyway, Anybody who
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goes in the store and buys groceries or has to has to pay it,
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has to pay a bill, knows that inflation is a lot higher than what
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they say it is. In unemployment is a lot higher than they say it
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is. I mean, most a lot of these people are working two three
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jobs, and a lot of these these new jobs have been government jobs,
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and government jobs don't add anything to to economic growth. So, I mean,
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all these things are starting to manifest themselves in the in the rising gold
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and sober prices. I couldn't agree with you more. And you know,
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these government workers, that's kind of an oxymoron, you know, exactly,
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exactly really, you know. But hey, so the key is with all
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this uncertainty, all of this craziness that's going on, opportunities get created,
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right, absolutely, yeah. I mean the stock market he has kept going
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higher because of capital flows coming over from Europe because things are much worse there.
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Just buy Dow Blue chips, put your money there. And but the
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stock market is starting, it appears to be starting to roll over here and
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into crash season, which is which starts in August. So I mean the
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streets are littered with with shorts trying to call a top in the stock market.
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I mean that's another thing keeping it higher is shorts get aggressive when they
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start to see it rolling over, and then they have to cover when when
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positive economic data comes out or when when uh, positive earnings comes out in
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in a in a in a major Dow company or a major AI company,
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you know in Vidia, now the entire market cap in Vidia, you could
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buy the entire Canadian stock market now market cap of Video. So just incredible.
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How how how how the AI bubble just continues to grow you know,
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but that's you know, that's on the outside, you know, that's that's
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the poster child is an video. But underneath the if you look underneath the
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hood, a lot of these other companies are are starting to roll over.
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But you know, I mean, once we have a correction in the stock
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market, it's probably going to be just that, just a correction of fifteen
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to twenty percent correction, and then it's probably going to start going back up
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again. Well, you know that rates have to be cut. Oh,
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they know it. They have to. Yeah, you know, in a
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rising inflationary environment. That's the thing is gold is sniffing out. They're going
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to have to back off on that fantasy two percent target and lower rates.
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And once that once, once, once the market, once the market sees
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that, that's when the bowl market really gets going. I mean, we're
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just in the early stages of this gold boat market exactly. You take a
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look at at history. You know, I've been in this sector for over
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twenty years, and when I started to get into it, it was five
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hundred dollars. Five hundred dollars gold was that was the magic number, right
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dollar gold was unable to be vanquished. It was it created another cup and
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handle right below five hundred, and it was about a thirteen forty twelve thirteen
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year cup and handle below five hundred. And once we had that monthly close
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about five hundred, gold doubled within it. Within a couple of years,
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it got to one thousand dollars pretty quickly. So if you take a look
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at that happening again, then of course gold breaking out from a thirteen year
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cup and handle pattern below two thousand, a doubling would be four thousand dollars.
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So I wouldn't be surprised to see gold at four thousand dollars within a
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year or so. Me neither, And I have a couple of years on
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you. I started buying gold in ninety nine at two hundred and eighty bucks
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announce wow. And and you know I was always a gold bug from the
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time I was a kid. Yeah, me too. I went through my
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father's change when I was a kid to find silver dimes. Yeah, silver
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orders. I still have them, I remember. So this is nineteen sixty
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five. My brother came into the kitchen and he had like a handful of
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silver quarters and he dropped them on the floor. And you know how in
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that sound that client that you know it's silver, and then he dropped the
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copper clad ones and new ones and he's like he dropped the bottle cap on
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the floor. Yeah, garbage. I never knew that that particular moment in
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life would have any effect over my future. But here I am, you
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know, been here for fifteen years espousing this sector, and let's face it,
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there's big difference between the metal and the stocks. Oh, big,
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big difference, yes, especially during this bull run. I mean this is
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he's not your father's bullmarket new But the point is that eventually, you know,
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the metal will the stock should be leading the metal. It hasn't been
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the case now, but eventually it's going to happen. Because look, thirty
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dollars goal, thirty two dollars, I mean thirty two dollars silver, David,
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What does that do to the economics of every silver mine out there,
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including the byproduct? Oh they've been they've been operating in a loss for so
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many years, you know, but twenty five dollars all in sustaining costs has
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been basically the level. And now that it's now that it's if once we
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have that floor at thirty, you know, most of these silver producers are
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going to be profitable now, and basically it's the but you want what you
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really want to look at is that margin compression that held the stocks back for
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so long for the past four years. Right the Q one, you started
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to see it. In Q one, the gold price averaged just below twenty
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one hundred dollars an ounce, and the silver price averaged I think around twenty
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three twenty two dollars an ounce. And if you take a look at the
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at Q two, you know, we've got another month to go in Q
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two, but the gold price is going to it looks like it's going to
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average over twenty three hundred dollars. That's that's that's you know, almost three
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hundred dollars probably going to berow three hundred dollars higher than Q one. And
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these and these uh majors, these these mining companies are are going to be
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throw are throwing off gobs of cash now because what was happening before was we
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had we had margins, We're not increasing as high as as a gold price.
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Right it was, margins were trailing the gold price rise. But now
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margins are are rising, are basically staying pretty much where they are, maybe
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rising a little bit while the gold price has taken off. So these companies
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are are you know, they're Q twos are going to be phenomenal. I
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mean Q when we had Q one results. Uh. Several weeks ago,
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we had Numont, which is the poster child for the gold mine sector.
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Right, I mean it's the only gold stock on the S and P five
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hundred and it's also the world's largest producer by double right, I mean Igniko
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now is number two, and they produce almost twice as much as Igniko.
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Yeah, Barrack's no longer number two, it's now Igniko. So you have
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so but you have Numont's share price hit eight hit around eighty bucks in early
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twenty twenty two, while the gold price was still around two thousand. Well
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it got down to around it's COVID low's around thirty even though the gold price
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was even higher. So when you have the general that the general is,
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you know is basically Newmont. When you have the general showing all this weakness
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and remaining in a down trend and underperforming gold so much, then you know
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it basically sours people from the sector. But now recently you had Newmont have
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an off the charge quarter that it was their first quarter after they bbbled up
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New Crest bandon off the darts quarter. The day they announced their their results,
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the stock was up twelve and a half percent. It was it was
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the only it was the largest gainer in the S and P five hundred by
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far on that day while while the DOAL and the S and P were getting
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their ass handed to them. So that put gold stocks on the radar.
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I think for the general investor and these funds. Now, if once Q
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two comes out and we have another blowout quarter, when you're going to I
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mean, like I said, the gold prices averaged over twenty three hundred dollars
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here in Q two, unless you know, gold falls out of bed for
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some reason in the next moment, it looks like it's going to average over
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twenty three hundred and Q two. These funds, these page funds, these
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fund managers, they're no, they're no longer are going to be able to
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ignore this sector anymore. They're going to have to participate, right And when
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you see a flood of funds and big money coming into a small sector like
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this at once, I mean, if you take the entire mining sector,
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it's it's got the that's basically got the market cap of a round home depot
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of the entire sector, and funds want to get in. I mean it's
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going to be you know, the old case eupheism. I think it was
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trying to put Niagara Falls through a garden hose. I love that euphemism.
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So that's basically what you're going to see when these fund managers have to get
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into the into the goal, especially if the stock market is starting to roll
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over at the same time this happened. So we're going to start to have
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Q two results in in I think late June. So that's what we're geary
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up for. You know, while the goal price is consolidating below that round
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number of twenty five hundred, that's the number it was shooting for. It's
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it's got this you know, this double top that everybody's looking at right now
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at twenty four fifty. So it's brought in some healthy profit taking into the
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mining sector because it did get it. You know, it did go pretty
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far, pretty fast, so we need some consolidation year. Uh but uh
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yeah, I mean this is just the beginning. I mean, I know
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people are a lot of people are frustrated with a lot of their juniors and
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not really performing myself included. But you know, once it's this is the
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way it always happens. You know, the the majors move, and the
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royalty companies moved, then the mid tiers move, and then the juniors move.
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And we've already seen some major moves in a lot of these juniors,
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but we haven't seen the sector really take off yet. I mean, there's
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still a lot of stragglers that you know that have that a lot of these
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juniors they have great projects, but they mismanaged capital markets and they've correct and
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they've ended up having to have too much delution. So their upside is now
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is now lower than it was before. Say you accumulated a stock, you
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know, last year ahead of this, and you were expecting the gold price
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to break out, and you were expecting the miners to take off and the
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juniors to take off with them, and you were accumulating these stocks and they
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had ten times upside. But now with the dilution that these companies were forced
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to take at lower prices, your ten baggers have now become two or three
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baggers maybe at your accuterlation rice right, yep. They so with Newmont from
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twenty three to recently to April, it made a perfect cup and handle.
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Yeah, it curfect exactly. Yeah, you've got a nice cup and handle
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in there. I mean it broke its down trend. Yeah, and yeah,
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it's it's it's it's starting to lead now. And that's that's what you
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need to see. You need to see the leader lead and it's volid,
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but it needs to get above forty five forty six. That's that's where Newmont
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gets getting. I think that's where that's when a lot more buying comes in
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once. Once it gets above there probably won't be much longer. I mean
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it should earnings should do it because whatever, well yeah, I mean plus
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also you've seen Q two, you've seen the oil price go lower. Yeah,
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so you've seen the oil price go lower, and you've seen the gold
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price go exponentially higher. So you've got you know, the added to three
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hundred dollars to your to the gold price from the average you know, twenty
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seventy, twenty ninety and Q one, and you've got the oil price has
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also gone down a couple bucks, you know, because you know, with
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these miners, especially you know Newmont, we've got these big open pit mines.
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You know, oil could be fifty sixty percent of your cost. Easy,
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easy, It's the biggest single component of yours structure. And then the
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labor which is just going higher than nothing you can do about that. And
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then the US they're unionized as well, so yeah, they're all in sustaining
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costs around fifteen hundred I think right around right, yeah. So so basically
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you should see a huge earning spike in I don't know the insiders buying Neumont
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at all. I haven't noticed recently. I haven't checked that. But like
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I said, I mean you see a back to back blowout quarters in the
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major, which is in the general, which is Newmont. They can no
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longer poopoo this sector anymore. And you know, they've pretty much ignored it
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because there really hasn't been a reason to get into it because of that margin
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compression. While the stock market continues to go higher, AI continues to go
21:29
higher, Crypto continues to go higher. Why why should we mess with these
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gold stocks that have been underperformers for so long when we were making so much
21:38
money in these other sectors. But like I said, no longer ignore it
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once you know, once these Q two reports come out, all right,
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So here I just popped up insider trades for Newmont, oh Okay. In
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the past three months, there's been twelve open market buys and one sell.
21:56
In the past twelve months, there's third tent five buys and thirty nine cells,
22:03
which means that before this quarter there were actually only twenty three buys and
22:11
thirty nine cells. So that's telling you everything you need to know there that
22:17
the insiders know what's coming. They bought one hundred to one hundred and seventeen
22:22
thousand shares in the past three months. Oh in this sale was for nine
22:27
hundred and thirty five shares. Basically, there were no insider sales on Newmont.
22:34
Now I'm not telling anyone to buy it or anything else because but you
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know the old saying there could be many reasons why an insider sells shares,
22:44
but there's only one reason why they buy them, right, especially if they're
22:48
buying in large blocks. Yeah, I mean, and you know these juniors,
22:52
you say, these little idy buys, and it's just it's just management
22:55
tried to put lipstick on their pig. Yeah. Well, their directors bought
23:00
little amounts, but the officer, Peter Wexler bought seventy one thousand shares,
23:07
so I don't know if he was exercising. Those are options, you know.
23:11
I can't spend the time right now to analyze the pattern, but open
23:17
market buys those are the ones we care about, obviously, and those have
23:22
been pretty vigorous. So interesting times here, David, just tell us how
23:29
we subscribe to Junior Minor Junkie and why we should. Okay, yeah,
23:33
you go to my website Junior Minor Junkie with a y dot com. And
23:40
I'm completely transparent with my trades, with my investing, and I teach investors
23:45
how to accumulate positions and how to also basically what my service offers is it's
23:56
basically a NonStop shop for the just metal sector. I give you an each
24:02
each weekly update, I give you a macro picture of what's happening, and
24:06
I do a little commentary, and I also cover all the stocks that I
24:10
own and that I recommend to subscribers. And I also have a watch list
24:14
of twenty more that that that I cover and top you know, the top
24:18
news stories of the week, and I break down technically what's going on with
24:23
with each stock each week and what I what I feel is what important events
24:30
have happened recently in the sector during that week. So and like I said,
24:37
completely transparent. You know, all the trades that I make, that
24:41
I buy, that I sell, the money that I made, the money
24:42
that I lost, everything is is basically all the information is there each week,
24:49
updated for my subscribers to see. So they say, they see my
24:53
mistakes, so they they learn from my mistakes as long as well as I
24:57
do. And before I invest in a company, I write up a full
25:03
detailed report of the company and I send it out to my subscribers and I
25:07
say, hey, this is a company I'm going I'm going to start buying.
25:11
So we all try to get into it at the same time. So
25:15
uh, basically we're all in it together in my service. I mean,
25:18
you know, that's the only way to do it, because you know,
25:22
my big, my, my big reason for investing in a stock in a
25:26
junior is I want to see that I want to see the management with skin
25:30
in the game. I want to see them participating. I want to see
25:33
them putting their hard earned money into the stock. So you know, if
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if if if if, that's that's basically my number one rule before I get
25:41
into a stock is I want to see management participating in finances. I want
25:45
to see management holding shares. Then why not run my business that way?
25:51
All the companies that that that I recommend, I'm into and and I have
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large positions, you know. It's it's it's it's a it's a very high
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network PORTFOLI. So it's basically a trading service. So if you want to
26:04
learn how to accumulate juniors and how to take how to take responsibility of basically
26:12
your your training and your risk management. I teach all that in my in
26:17
my service. All right, excellent. Well, hey, it's always a
26:19
pleasure having you on. If you got any questions for David or myself,
26:23
shoot me an email KL at Carrie Lutz dot com. Link in the show
26:29
notes to this interview on Financial Survival Network dot com to david site. So
26:33
please visit us, and while you're there, sign up for your free newsletter.
26:37
David. We're getting into exciting and very interesting times here. Hopefully we'll
26:42
all come out the other side with more than we started. Thanks Kerrey,
26:45
thanks a lot for having me on. Thanks for listening to Carrie Letz's Financial
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