TKR018 | The Golden Touch with Florian Grummes on the Kinvestor Report
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welcome to the conest report where we
sit down with industry experts to
discuss the latest developments of the
Canadian small cap sector I’m your host
Arlon Hansen lots to talk about in the
precious metal sector right now as
always please be aware of our standard
disclaimer in the description below that
no part of this interview should be
taken as investment advice and as I
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today I’m joined by Florian gromis an
independent analyst investor Trader and
consultant who’s been active in the
financial Market since 1995 he started
publishing his famous and outstanding
Midas Touch gold model and has helped
lots of followers to protect their
Capital today is well known for
combining technical fundamental and
sentimental analysis into one accurate
conclusion about the gold market through
my touch Consulting and uh this guy is
bullish right now Florian thank you so
much for joining us today how are you
I’m good thanks for having me alen
pleasure yeah awesome uh well it’s no
secret that um a lot of these
Commodities are making fresh highs so
there’s a lots to cover and uh I
understand that you much of your
investing thesis is covered by the
charts and technicals and uh so let’s
start with the you know gold and silver
where do you think we are right now in
in this bull market cycle sure uh well
well let me let me maybe first make one
important point the the main thesis of
course it’s it’s all about sound money
and so that’s why my focus is on the
precious metals since uh now not more
than 23 years already um so that’s where
I’m coming from but of course over the
over the time I figured that it’s it’s
good to understand timing and Market
movements and Trends and I believe that
technical analysis is very helpful
because it really breaks down what’s
actually going on in terms of price and
timing and volume yeah and and money
flow right that’s that’s certainly what
we need to come in our in our favor for
these charts to go higher um do you ever
use just this is a maybe a silly
question but do you ever use charts to
predict where these Commodities can how
high they can go because once you get
into Uncharted Territory like all bets
are off but do you use some of your
technical analysis to kind of figure out
hey gold can go to $3,300 or $5,000 in
else oh yeah yeah of course I do I mean
of course it’s kind of like a
forecasting in in as you said Uncharted
Territory but but still um like let’s
talk about gold I mean look we had this
um three and a half year consolidation
correction since gold hit a new all-time
high back in the summer of
2020 uh the alltime high back then was
2075 and over the following three and a
half years gold went back and forth
between that number and on the on the
Lower Side the 1615 level level and um
it’s an inverse Head and Shoulders
pattern a very basic uh technical
analysis kind of stuff if you use that
uh that pattern um and and you you
basically take the depth of that pattern
and put it on the breakout which is the
2075 kind of level yeah you end up with
$2,535 and that has been my target since
uh I think last October when it was
clear that we are on the way to break
out and here we are just missing another
100 and something dollars to that Target
and I’m very sure we’re going to see it
over the next few weeks actually and um
in the much bigger picture we also know
that gold has been consolidating
basically since 2011 already right so
back then we made the alltime high at
$1,920 and then it took uh quite a long
time until gold took out that alltime
high and red as I just said before in
the summer of 2020 to 20 75 but in the
very big picture this is a cup and
handle pattern also I’ve shown it many
many times over the years many other
people have written about it and that uh
has a much uh higher price Target
actually this huge formation this huge
cup and handle pattern and again you
take the depth of that cup and you put
it on the breakout level and you end up
around
$3,000 so um that’s the longer term
price Target that I have for gold um for
the shortterm it’s the 2,500
$35 music to my ears and probably a lot
of other gold investors here right and
so like we we’ve seen a tear here in the
last kind of couple months what do you
think some of these major catalysts have
been that has really started to drive it
on on a macro
picture right look I mean we’ve been
running gold has been running against
this
$275 resistance level for many times
over the last years so first of all
technically speaking a Breakout this is
a clear Trend confirmation new money is
coming into the sector suddenly the
sector gets more attention people see
the performance now they want to be part
of it and that’s basically the trend
feeding the trend um so that’s one of
the main drivers first of all but of
course from a fundamental side you had
first of all I think the the Ukraine war
and the Caesar of Russian assets when
especially the Chinese I think really
became aware that they need to move more
and more of their dollar nomin assets
into physical gold um they also
motivated their own people basically to
buy physical gold and in the background
it’s the Shanghai gold exchange for many
many years already trading only physical
gold and now that has been a big
Catalyst I think since yeah think since
last Autumn I think in in late August I
I published a few charts uh showing the
the the premiums in the Shanghai Gold
Exchange already in the physical market
and um the the West on paper uh
Speculator managed to to take down the
gold price during the the gold week in
sh in in in China late September early
October you remember a gold dropped to
make a final low at 1810 then you had
the remember
clearly it was a very clear dump during
that week when the Chinese were not
trading uh physically so on Monday you
on the over the weekend you had the the
Hamas Invasion and then on Monday gold
took off you still have that Gap at 1835
but uh yeah gold never looked back it
quickly red towards a new alltime high
actually in early December then by
2,150 and since then the breakout is is
happening and and here the r is is
gaining more steam um it’s been a
fantastic ride over the last few weeks
and I I still think we’re not at the top
but main driver has been the physical
demand from China uh the premiums have
been between two and a half and 4% at
some point oh wow um and um I think
there is a lot of Arbitrage going on and
it’s simply not possible anymore to
suppress the gold price via paper
dumping uh positions like they they used
to do very successfully few decades very
so that’s a big driver then of course
you have the physical demand also in
India which is a Big Driver generally
the whole geopolitical situation is very
instable at the same time all the other
markets have been doing really well
stock markets went much higher over the
last few months Bitcoin has done really
well so there’s more and more money in
the system looking for opportunities and
um so at some point I think this money
also figured like hey what’s been
lagging it’s the gold price um so so
that and then of course I mean we still
have a very high uh inflationary
environment and that’s also always been
a good way to protect yourself against
this by buying physical gold so I think
a lot of factors coming together here um
personally the main thing is you get a
breakout and and basically that attracts
new the money the money flow starts
coming in yeah and the generalist
Capital starts coming in and that’s a
lot of a lot of capital entering a
pretty small market right so uh and so
how has the price of gold been
correlating with the equity market and
the gold Equity stocks like the the
majors and the mid- tiers and and how
does that money flow enter the market
like is there do you think they buy the
the majors first and once those have a
big run then they start entering the mid
tiers and then once those have a big it
starts flowing into the Junior market is
that what you typically see that’s what
you typically see and that’s mainly or
let’s say basically still one of the
kavats the mining stocks are still
massively lagging right and and you’ve
been seeing gold running ahead now
silver is starting to catch up U many of
the mining stocks have not done much or
just very little or are way below their
2011 highs for example while gold is up
a few hundred dollars in comparison to
that oldtime high from
2011 and I think this will take more
time I think generally speaking the
market is still not really trusting the
breakout in Gold so that’s what I’ve
seen personally over the last few months
and weeks like many times people
questioning like why suddenly is gold
breaking out for me it was clear because
the charts were showing it very clearly
uh but I think uh the the mining stocks
still lagging that kind of money flow
it’s slowly coming in and I think once
you’ve going to see the numbers coming
out uh for the for the first quarter
probably you you many more people will
realize like wow I mean at
$2,300 gold these big mining companies
making actually really big money so that
uh probably still takes a little bit um
I assume that uh there’s lack in the in
in in in the mining stocks
they they will catch up at some point
but probably not not immediately and
massively over the next few days and
weeks because I think as I said 25535
that’s my target for gold and after that
I believe we’re going to get a pullback
uh and and um that will again hurt also
the mining stocks but once gold tested
that breakout around $2,100 maybe later
in the summer or later this year and
then really starts the r TOS 3,000
I think at that point the mining stocks
will really catch up and actually be on
fire yeah my experience suggests that um
the equities don’t often run on a gold
price breakout they they wait for that
pullback that test and once it holds and
test that then they start believing that
those levels are going to be good and
then they start gobbling these stocks up
so that yeah that make that makes sense
to me
um so silver always seems to be a little
bit of a lagger with gold too right
right um it’s certainly the case this
time um do you ever see that decoupling
where maybe you know industrial demand
or solar demand or clean energy demand
for silver really starts creating a like
a a much truer Supply demand fundamental
for silver and it decouples from that
that you know just following being
Gold’s ugly sister or I think it’s
prettier but you know what I
mean yeah I I mean silver usually always
follows gold and and only in the last
inning of of a of a rally and also in in
if you zoom out in the bigger picture in
in in the last inning of a bull market
it really shows up to the party and is
doing its own thing and and that’s
exactly what I actually expect over the
next few weeks so we’ve seen already the
last one two weeks more and more that
silver showed up with strengths while
gold was going sideways or having a
little bit of a
pullback and that actually is already a
warning signal because usually at the
end of a move in the sector silver shows
up to the party and um so that is
somehow also not immediately a sell
signal but it’s a warning signal that
this move is is actually coming to its
end in the next few weeks probably and
that would fit uh well together with the
the seasonal pattern in Gold where you
usually have a top somewhere between
late February and and early May so this
year it looks like it could be the first
two weeks of May
probably um so if we would get to that
20 535 in early May and at the same time
silver going above $30 maybe even
rallying hard until let’s say
$35 uh that would be a warning signal
that in the short term this rally is
coming to an end and that we’re going to
get that pullback back to the $2100
level in gold and um if you remember the
last bull market between 2001 and
2011 most of the time silver has been
following only in the last inning on of
all these Ries it it it it did its own
thing and then in
2010 for the last let’s say one year of
that 10year bull market silver really
went nuts and it went from $17 to $50 on
its own it didn’t really care anymore
about what gold was doing and something
similar like this will probably
happening over the coming years at some
point but I don’t think that we’re there
yet at the moment yeah I I I I totally
agree with you on that um so you you
talked about like a 10-year bull market
in in gold from like 2001 to
2011 where do you think we are at now in
our bull market for gold are we in
inning one are we in you know inning
four um do you think this is just the be
the true beginning of a bull market like
a multi-year bull market what stage do
you think or should we start thinking
about pairing back positions in these
runs um right just to to protect our
wealth well I I I I would not sell any
physical uh uh position even though gold
might have a pullback of $3 $400
somewhere between May and let’s say
September but of course your mining
stocks will get hurt and any leveraged
long position is in in severe danger
during such yeah yeah so um that means
uh for me it’s I’ve been only Trading
long the last few uh months uh but once
we get to those numbers and I have more
signals on the table confirming that we
probably see a short-term top I will
only do short trading in in in the gold
market and um I will definitely also
scale back on my mining stocks because
uh generally speaking also during the
summer you don’t really need to be fully
invested uh whatever Market you are in
so typically the stocks are you you know
the old saying sell in May and go away
but don’t forget to come back in
September so I think very generally
speaking that’s still a good rule um so
you don’t need to be fully invested over
the summer and espe especially also in
the mining stocks usually you don’t need
to so um I would definitely scale back
on the more speculative positions yes
yeah okay so speaking of uh owning
physical like when you what’s your
portfolio breakdown mix uh like what
percentage physical what percentage ETFs
what percentage
producers if you can share that with
with us so so the main position of
course is physically gold and silver and
it’s roughly speaking 25% okay I don’t
any ETFs I don’t believe in
ETFs I want to have direct ownership uh
of the stocks yeah so um I have a Mining
stock portfolio of course and um I have
been more focusing on the on the let’s
say the mid to larger producers because
my thinking was that they would do well
in in an uptrend in Gold um while the
more smaller Juniors explorers the more
speculative ones of course they can r a
few hundred% within a few weeks but then
again it’s it’s hard to find the right
ones because there’s so many out there
and um usually they come a bit later so
at some point the big mining companies
will go on a buying spree they’re making
good money now and I think that will
then really kick off the rally in those
smaller mining stocks and I don’t think
that we are there yet and um so far it’s
actually challenging to find uh a lot of
stocks that have gone up more than 100
150% over the last few months there are
a few but most of the stocks have done
something between 20 20 and 60% I think
um so so you didn’t miss out a lot uh so
far but I said initially once we have
this test of the breakout and then the
big move towards $3,000 starts I think
that’s will be the time when when you
want to be fully invested in mining
stocks yeah and then the money flow will
start coming a little lower down the
food chain to to as well and they’ll
probably start seeing some m&a activity
which will create some juice in the
market and and liquidity for the
investors out there
um out out of all the Commodities like
we we talked earlier that you know a lot
of them are making fresh eyes copper you
know uranium just had a huge run you
know Etc is there is there one that
stands out to you right now is like this
is this thing has got some serious
torque the Market’s there the money
flows there the technicals are there
what would be your number one pick for
Commodities right now right now it would
be silver for the next four weeks it
would be silver yeah and if you ask me
for a longer term time frame then uh it
would be something completely contrarian
at the moment which is natural gas which
is completely beaten down and nobody’s
talking about it it’s
nobody completely out of fashion at the
moment so that’s the kind of stuff where
I’m interested to build a position
slowly longer term with like a time
frame let’s say three to three months to
maybe a year um I think that would be
the one but it still seems that there is
a bottoming process going on and you
still might have a little bit more pain
to come but that’s a market that I I I
get more and more interested in um
because it’s just completely out of fish
yeah yeah 100% it is um and so can you
rattle off or can you name some of the
the gold and silver equities that like
or that you prefer to participate in a
bull market with yeah I mean if it comes
to the big producers I’m a big fan of
ago Eagle of course I think they have an
excellent management excellent mins uh
really really great company so that that
would be probably one of the the the big
top mining stocks in in in in the gold
sector um of course um Newman and
baric are bigger and would
probably be immediately on on on on top
of the list for the big money managers
but they have problems
uh just uh the other day we heard that
that Mali um is is maybe trying to
nationalize a mind that that belongs to
Barrack so so they have problems in in
many areas of the world um so I would be
a little bit cautious then when it comes
to like the the the the mid midsize
producers um I like Alamos very much I
think again excellent
management and um also great track
record by the way I mean that’s
something that I’m very keen on I always
want to see what is the market telling
me so often in my research I just
compare all the stocks and then I want
to see the performance because I believe
the market knows more than myself so and
Alamos was one of the best performing
big gold mining companies um so that
that’s a great stock then um I like uh
Victoria gold okay Yukon one mind but
great management been following them for
the last 10 years I think they have also
nice leverage on the gold price uh
really good company um yeah that’s
probably the the three top names that I
would say uh on my personal list yeah
and so they’re big they’re liquid
they’re producers they make money that’s
kind of where you prefer to be at this
stage in the market and then so what
about some silver
names well uh interestingly enough uh
Endeavor silver is back on my list used
to be a big fan of that company many
years ago uh I have very good memories
of of Brad
Coke and um um they’ve done really well
I think they they have good potential
here they they seem to recover and the
market is is paying tribute uh has done
really well um other than that I like
puya silver they have done really well
over the last which are kuya K KU ya
exactly yeah yeah and they got assets I
want to say Peru they’ve got asset in
Peru and I think also good people
running it um that’s a company I like
and um well I mean from the smaller ones
uh of course right now if if this is
true what I’m just saying that over the
next four weeks we might see silver
really exploding you can probably buy
any silver Mining stock because will do
well for a few weeks right yeah yeah
throw a dart you go down the ladder and
you pick the smaller ones like aftermath
silver yeah yeah this would easily
double or triple over the next few weeks
no problem I’m gonna hold you to that
Floren right on well that’s uh that’s a
that’s a great rundown and uh I don’t I
don’t need to take up a lot of your time
I get your thesis I agre agree through
thesis and uh let’s hope it all all
unfolds the way that we want it to and
um I’m sure all our listeners will
appreciate some of the names to look at
too as well so uh yeah I really
appreciate your time and um again thank
you for joining at the investor report
and be sure to check out the midest
touch Consulting and we’ll put some more
information at the the bottom of our
page for more investing Insight in the
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until next time thank you very very very
much thanks for having me Alan what bro
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Arlen is joined by Florian Grummes, an independent analyst, investor, trader and consultant who has been active in the financial markets since 1995.
In this episode of The Kinvestor Report, Arlen and Florian discuss some of the recent catalysts for gold and silver, how the price of gold has correlated with majors, mid tiers and junior stocks, and some insights on how to balance precious metals investments.
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Disclaimer: The information provided in this video is for educational purposes only and should not be considered as investment advice. Always do your own research and consult with a qualified financial advisor before making investment decisions.