David Erfle: Gold’s Price 2024 Potential, How Silver Gets Above US$30

David Erfle: Gold’s Price 2024 Potential, How Silver Gets Above US$30

[Music]
I’m Charlotte McLoud with investing
news.com and here today with me is David
fley editor and founder of Junior minor
junkie thank you so much for being here
great to have you thanks again for
having me on Charlotte nice to see you
again as
well really good to be speaking with you
and we’re catching up after pdac when we
had a a quite brief conversation I think
this one will be able to go into a
little more depth and of course where
we’re going to start is with gold so if
we look back to that PDC time when we
were speaking that was at the beginning
of March and I think we can really trace
this breakout and gold back to almost
that exact point in time so I wanted to
take a look back at Gold over these
almost two months at this point and ask
you about its performance has it has it
surprised you during that time
well the move the severity of of of the
move up upwards has really not surprised
me because I’ve been expecting a
breakout for a really long time above
that 2100 level that was the that was
the the magino line of resistance right
for for four years that
22100 level just gold could kept running
up there and falling as soon as it got
there but it created this huge base as
it was doing so so whenever you have a
breakout of a of a large base the
breakout move can run rather fast I mean
the move really started uh in in the
middle of February when gold tested
2,000 for the last time and then gold
went up in round numbers about
$450 in two months since then so uh and
in the middle of that we had that major
breakout so the move higher you know it
remained overbought for a really long
time that wasn’t really surprising
considering the Catalyst the catalysts
basically
for the the moo we had geopolitical and
uh
macroeconomic catalysts happening at the
same time so that wasn’t really
surprising
no okay okay thank you for going into
that and I’m hoping we can talk a little
bit more about Catalyst for gold right
now I’ve heard a lot of different ideas
about what caused that gold breakout and
I’m wondering I guess what you’re
watching right now what are the main
factors that you’re paying attention to
for gold at the moment yeah well the
gold price started to break out on
macroecon for macroeconomic reasons and
then when the Middle East Powder Keg
started to explode that’s when gold
really started to bust a move higher and
it nearly reached
2500 um so now you know after after four
consecutive weeks of closing above its
weekly upper Binger band The Binger band
is is an algorithm designed to keep the
keep the price of something within bands
95% of the time lower and upper bands so
gold closing above its weekly Binger
band for four consecutive weeks there
was a 99% chance technically of the gold
price having a correction this week and
it started right away on on Monday as
Middle East tensions pretty much calmed
down so so now the market is pretty much
focusing on the macroeconomic again
because we got the pce data inflation
data coming out on Friday and that’s the
fed’s Pervert Target right and at the
same time we’ve got the Federal Reserve
on a blackout period before the next
Federal Reserve meeting which is next
Wednesday and um the towards the end of
last year there were job owning rate
Cuts you know up to six rate cuts by
2025 and three rate Cuts this year well
now they’ve they’ve they’ve talked back
walk that back all the way to possibly
no rape so the uncertainty that’s going
on the the market realizing that the
feds between a rock in a hard place the
debt situation the geopolitical
situation all these things are factoring
into the to the gold price now so I
expect it to remain pretty volatile here
um when we get that pce data on Friday
depending on how the market uh accepts
it or doesn’t accept it or uh comes to
the conclusion that hey it’s going to be
be higher for longer even longer um the
the dollar which is consolidating around
105 which was former uh which was a
former resistance now it’s it’s creating
a bull flag here to possibly go to 107
now the gold price and the dollar have
been going up uh together as a safe
haven because of what’s happening in the
Middle East so will the pce data coming
in hotter than expected which most most
everybody’s expecting here it will keep
the keep the Fed you know higher for
longer you know higher interest rates is
a is a is a is a big drag on this
economy and the stock market is starting
to crack because of that so will gold
focus on that will gold Focus will will
the Middle East Flur up again there’s a
lot of things going on here so but gold
can actually correct all the way down to
2200 even it’s it’s corrected down to
2300 already it can correct down to 23
at 2200 and still be in an up print so
Gold’s got a lot going for it right
right now and um the stock market is
there’s a lot of uncertainty in the
stock market there’s a lot of
uncertainty in fed policy so um I’m
really not concerned about the gold
price I’m more concerned about uh when
the gold stocks are are are are going to
finally start to react like they
historically react and and show uh a two
to three times leverage in the gold
price price which which they failed to
do thus
far thus far thus far okay and I will
we’re definitely going to come back to
the gold stocks but just before we go
there you know we’re talking about the
fed and these interest rate cut
expectations which have been steadily
reducing from where we were kind of at
the end of last year as you mentioned so
I’m wondering you know why have we seen
that economic strength in the US why why
is that continued because I think that’s
kind of what’s Behind These pushing out
of the interest rate cost well a lot of
it is short covering right you see
shorts start to short the stock market
ahead of of Economics of of US economic
data coming out the data comes out
strong and they have to cover so a lot
of this is is has been short covering
and a lot of it has been AI stocks
continuing to go to go higher and now
we’re starting to see cracks in AI
stocks you know Tesla’s already broken
uh broken down a while ago Apple started
to break down Microsoft has started to
break down so people are starting to
figure out hey maybe I should I should
take some of these profits off the table
so um but but but this but but the US
economy is still the the strongest
economy in the world and it is TW makes
up 25% of the global economy but
basically you know all all of our growth
has come from debt I mean since 2008 all
all US debt that’s governments you know
Federal governments State Municipal and
and and and and corporate debt and and
household even cons and Consumer Debt
it’s all grown almost 95% the debt so
and just the federal debt alone has gone
up over 200% so um the uh the Market’s
starting to realize that hey this this
debt will never be able to to be paid
off it’s going to have it it it’s
basically going to have to be H H have
to be inflated away so but but but the
US isn’t really in a position like they
were in 2008 when they capitalized all
the banks to to try to inflate away all
the debt there’s just it’s it’s it’s
becoming too much of an issue so that’s
what gold price is is sensing is that
that uh the FED is stuck and um they’re
basically can’t be trusted in what they
say anymore because they they went back
and they in late last year they they
started saying that hey we’re going to
cut interest rates and now they’re
saying no we can’t cut interest rates
could because inflation is remaining
higher for longer and the market
starting to figure out that hey when the
when the FED finally does have to cut
rates they’re going to have to do it
with Rising inflation and that’s
stagflation time and that’s that brings
that brings uh back memories of the 70s
so all all these issues you know gold is
sniffing out all of this and that’s why
I I continue to believe that gold is is
still going to go a lot higher I mean
based on history it’s it’s it’s it’s
about to really take off after a major
breakout yeah and that is one of the
questions I had in mind to ask you is if
what we’re seeing right now can be
looked at you know historically in
comparison to to another era so it
sounds like yes yes absolutely I mean
the gold bull market that started at the
turn of the century in in 2001 um what
really kicked it off was alen Greens B
coming out during the for on the first
trading day of 2001 calling an emergency
meeting and doing a 50 basis point rate
cut um you know and every time the the
stock the the gold has had these major
up legs it it’s coincided with the stock
market going into a bare Market um and
with within the you know we we s we saw
the gold price from 2001 to
2005 double from 250 to 500 and then we
had a consolidation period for a couple
years and then we saw the gold price
double again after the consolidation was
over from 500 to a th000 we saw another
consolidation for a few years we had the
the great financial crisis in 2008 where
it knocked gold back down to to to below
700 but then the gold price doubled
again from a th000 to to to nearly 2,000
in a in in in a couple of years again so
I I have no reason to to believe that it
won’t happen again here so that means
that will we see see a gold price
upwards of $4,000 in a couple years I I
don’t see why
not all right and and you’ve mentioned I
think many factors that are adding to
these tumultuous times and I’m gon to
I’m going to throw in one more which is
where we’re in an election year for the
US so does that have have bearing on
what’s Happening yes it absolutely does
and uh you bringing that up is
interesting because um in the in the US
here we’ve had this is you know we’re
the world’s largest Su largest
superpower and we entered Uncharted
Territory last last uh uh Monday when
for the first time in history a former
president is being tried in a court of
law and this is happening during an
election year and most everybody is is
is concerned about this because they see
it as being highly political Donald
Trump is leading in several polls for
for as the as to to be the GOP candidate
so if he’s he’s put on trial in New York
now and there’s and there’s three other
trials after this that he’s got to go
through he can campaign and if he’s if
he’s actually put in jail before the
election I mean this the potential for
civil arrest is just unfortunately
really really out there so um the gold
price is sniffing out all of this as
well um uh you know um if you if you
take a look at at what’s happened um
with this with this election it’s it’s
it’s really unfortunate how you know the
two sides are becoming farther and
farther and farther apart and then you
know once the election is over I don’t
see the other half really accepting the
Victor just like the just like what’s
happened during the last two elections
but this one could be even more heated
because like I said I mean the leading
candidate might be in jail by the time
it happens and um it’s going to be
really interesting how it’s going to
unfold but I don’t think it’s going to
get lost on the gold price that’s for
sure yeah I I think we already got a
taste of that unrest at the last two
elections like you said so that that
would definitely be something to keep an
eye on and I’m sure we will be able to
get away from watching that if we wanted
to so keep an eye on that going going
back to gold one more question on the
gold price so you mentioned 4,000 as you
know I think more of a longer term level
for gold in 2024 I think people are are
wondering what’s the potential this year
so what are you
seeing well it’s already hit its first
uh see it broke out of a of a technical
pattern the most bullish technical
pattern uh in technical analysis which
is a cing handle pattern and it was a
13-year cupet handle which it’s broken
out of and the first Target was 2500 we
we pretty much reached that Target with
gold hit 20 with 2450 a couple weeks ago
so after after a period of
consolidation $3,000 is the is the next
Target it’s also you know a
psychological round number so I wouldn’t
be surprised to see a $3,000 reached at
some point this year uh but also you
need to take a look at the silver price
because the silver price has finally to
to to a certain extent has started to
play catch up here to the gold price but
its major magal line resistance has been
$30 an ounce for the past 4 and it can’t
get over $30 an ounce it tested it again
recently a couple weeks ago and fell
sharply back back down again so I think
once you get the silver price breaking
out above 30 I think that will really
get the bull market going in gold and
especially in Gold stocks and we also
need to see the gold silver ratio
trending below 80 it’s about 85 right
now so even though the gold the silver
price has started to take off it’s still
showing relative weakness to the gold
price although it is starting to Trend
lower but it needs to to Trend lower
below 80 to1 before we really get I
think some some movement in in the gold
stocks in relation to the gold price
because they’re still massively
undervalued in relation to
Gold okay okay so for silver that that
$30 level is key and what do you think
pushes it over the edge because it’s
very it’s very teasing it gets very
close and then it goes
away well I think I think going back to
what I mentioned before uh about the
Federal Reserve having to being forced
to lower rates because i’ I’ve been
saying for the past you know several
months that I don’t think the FED is
going to lower rates until they’re
forced to and being forced to means the
stock market really starting to to crack
and go lower the the S&P getting below
4900 and really starting to move lower
during an election year I think there’d
be a lot of political pressure for for
the FED to to to lower rates to despite
inflation being so high continue and and
well above its two its fantasy 2% Target
so I think when that happens that’s when
silver really takes off okay okay and so
of course it all ends up being connected
if yeah okay okay so I will I will let
you go back to what’s going on with the
gold stocks so this is really important
and it’s a topic that we also spoke
about during that early March convers
ation we talked about the disconnect and
how people are of course not very happy
to see the gold price at such
historically high levels and their gold
stocks not necessarily responding so are
we seeing any signs there that this is
going to change yeah we are we’re seeing
several signs um we’re seeing both gold
and and gold stocks started to
outperform the stock market right as we
came into Q2 and the gold and the gold
price was starting to break out above
that 20200 level that needs to continue
and it and it needs to
accelerate um and I think it will
accelerate once the stock market really
starts to see more selling and people
start to ro rotate those huge gains that
they’ve had in AI
stocks and and crypto also and they
start to start to say hey wait a minute
maybe I should put some of the some of
these gains into the safety of gold um
it’s it’s happening in China you know in
China there’s a huge bull market going
on in in in Gold it’s much it’s much
stronger than it is here you know
because it’s being participated by by
the people as well there’s ETF buying
there’s there’s physical buying there’s
Central Bank buying going on in China so
but that’s not happening in in in in the
west you know central banks aren are are
buying as much gold in the west and the
citizens AR aren’t buying uh gold via
ETF they are buying at Costco which you
saw you see you saw that gold that
Costco is selling upwards of $200
million a month in in in Gold uh in 1 o
gold bars but it hasn’t really
transferred into ETF buy quite yet I
mean the outflows have ceased and
they’ve started to turn the inflows but
um we really need to see investment
demand pick up in the West for in
Gold okay and we’re getting to the point
where we should start to see the the q1
results from the miners so I was going
to ask how how important do you think
that is for for the gold stocks and
interest in in Gold yes that’s that’s
very important as well because you know
that margin compression has really hurt
the gold stocks a lot you know the the
gold price basically went nowhere for
four years while inflation raged so um
gold averaged uh it looks like from from
uh what I’ve seen from uh production
numbers that a lot of these companies
have uh announced already um gold
average with the average price they sold
gold for q1 was about 2070 and that’s
that’s about $100 higher than Q4 so I
think uh you know the profits are going
to be much better but I think the Q2
profits are going to be even stronger
we’re not going to see those results
obviously for another three months but
uh yeah I think the the the the
companies that have you know that have
low all-in sustaining cost on the lower
end of the curve they’ll they’ll they’re
going to they’re going to report very
strong uh results
okay okay and and good point you know of
course we’ll we’ll see what with the
next quarter rows as well and that will
be important so I just want to also
check on on your focus right now so if
I’m remembering properly and I’m
probably going to oversimplify this but
I believe you were focused not on the
Juniors but on the later stage explorers
but and developers as well so is that
still where you were
at yes I’m I’m still not not not
concentrating on on early early stage
companies because uh there’s a lot of
these late stage developers and and
growth and small cap growth oriented
producers that have a lot of growth in
them I I like those uh much better
because they’ve already found the ounces
and they’re less risky but the problem
for a lot of them is is raising the
capital you know a lot of them have to
raise more three two three times more
Capital than their market cap to to to
start constru these projects so I’m con
I’m concentrating on these companies
that have multi-million ounce deposits
in safe jurisdictions and the management
teams have access to Capital they and
they and they haven’t blown out their
share structure in a bare Market while
drisking their projects you know several
of them they looked a lot more
attractive a few years ago but
unfortunately they’ve had to blow out
their their share structures to drisk
their projects in bare markets so
there’s not as many of them that look
attractive anymore due to that as far as
you know their upside is concerned what
once was three to 10 times upside maybe
maybe one to three times upside now
because of the blown out share
structures de risk project so it’s very
tricky you know it’s you have to be
super selective on on the companies that
you that that that you speculate on
still we haven’t had that aha moment
where the sector has started to really
take off uh We’ve we’ve we’ve seen
several quality issues bifurcate from
the sector and start to move higher with
the gold price but um as a sector it
still hasn’t really broken out yet
because we haven’t had the interest in
in in the retail Market return yet I
mean they left 12 years ago and they
still haven’t returned so we need to get
more speculative interest we in into
this sector especially into the Junior’s
base so until then it’s still a stock
Pickers Market as far as the juniors are
concern great and I was going to ask in
terms of the Juniors is there a point in
this this bull cycle where you would say
okay now I’m going to look at them or is
is it really not not worth it at at this
time oh yeah there’ll be a point
there’ll be a point well where I’m going
to say okay it’s
it’s it’s it’s time to start looking at
the more speculative end of of of the
Juniors the the more early stage the
ones with that have that have tied up
large land packages and they’re still in
the early stage of of defining a
resource there will there will be a time
while I’ll come back into those stocks
but uh that’s that’s not here yet okay
okay we’ll keep checking in with you on
that one all right as as we’re getting
closer to the end here I wanted to check
in with you on some comments you made in
one of your recent commentaries on
mindset and you’re talking essentially
about the importance of switching your
mindset from bullish or sorry bearish to
bullish and and you really have to do
that in order to kind of take advantage
of these moves so I thought that would
be really useful to go into
here yeah I mean um you know it’s once
you had a major breakout in the gold
price
historically um you know you’ve you
still got a lot of hesitancy in in the
junior space you know the miners take
off first the royalties and the mining
companies take off first and then it
trickles down in into the Juniors so
people that you know investors that have
had a lot of patience in
accumulating uh stocks during a bare
Market they have to continue to have the
patience to let their to let their
research in these companies and T and
taking a chance and and and accumulating
them when nobody wants them to pay off
because a lot of a lot of investors and
I’ve been you know I’ve been a victim of
this in the past and that’s how I
learned uh when I first got into the
sector you know the the the the the
switch was flipped and all the you know
most of the Juniors started taking off
and I i’ i’ i’ I’d been you know the
ultimate contrarian I was I was buying
fishing lines and I was accumulating
these stocks when nobody wanted them but
several of them hadn’t taken off yet and
and there was other ones that I was
watching that were leaving the station
and they were really starting to move
higher but uh you know I I I lost
patience in some of the ones that I was
down on and I took a loss on some of the
ones that that that hadn’t taken off yet
and I chased some of the the ones on my
watch list and it turned out to be a big
mistake because I because I basically
left a lot of money on on the table as
as well as showing some some uh some
some some some losses while you know in
a in a in a bull market so you know
that’s what I want to caution against
you know I mean if you if if you’re
keeping up with these with with these
companies and and you know you they
selling them should be company specific
not sector specific meaning if the
company does something that you that you
feel will be bearish in the long term
while the while while the sector is
going up absolutely sell it and get into
something else but if that’s not the
case don’t sell it just because it
hasn’t moved yet um you know that’s
that’s going to come you know once the
retail finally gets back into the sector
you know after leaving 12 years ago
these things are really going to start
taking off I mean if you take a look at
the entire uh asset Global asset base um
gold and the gold mining sector is less
than 1% of of the total Global assets
base that’s the lowest it’s been in over
a century so you know once these once
the retail starts to come into these
things they’re really going to move
quickly the quality ones anyway there’s
still a lot you know there’s still a lot
of uh of Lifestyle Juniors that need to
go away
uh that haven’t and probably won’t so
you have to be very wary of those that’s
why I say you have to be very selective
in the companies that you’re going to
hold while this bull market really takes
takes off and gets into the next stage I
mean we’re in the very early stages here
gold these gold mining Cycles they last
about three years we had we had the
first major one of the century was 2001
to 2003 then we had a consolidation then
we had another mining cycle from 2005 to
2007 another consolidation and then the
next one was 2009 to 2011 but since then
we’ve basically been in a depression in
in the junior sector we’ve had a couple
of six-month bull markets followed by
four-year bare markets it’s really you
know Zapped the life out of this sector
I mean people not only have forgotten
the sector but a lot of them really hate
it so that’s you know that is that sews
the seeds for a major bull market coming
because you know bare markets don’t last
forever just like bull markets don’t
last forever like I said we’re seeing a
lot of signs that we’re coming out of it
right
now that sounds like a really good place
to wrap it up but I will I’ll put it
back to you in case you had any finer
thoughts or if you want to let everybody
know where they could find
you yeah sure um I write uh a column uh
in Kitco it comes out every Friday uh
you can find me there or you can find me
on my website Junior minor junky with a
y.com and pretty much uh my last message
is if you’ve been accumulating stocks
and you’re very frustrated you know like
like my of course myself and a lot of my
subscribers and a lot of people in this
space um you know keep your head and
make your decisions on what on buying
and selling make them company specific
it with a bull market in mind now you
can’t you can’t be bare Market thinking
anymore we’re now in a bull market so
you know you have to change your mindset
or else you’ll let your emotions get get
the best of you okay really good thank
you so much for coming on to gold for
what’s going on in gold right now and a
little bit of silver this is really good
just my pleasure Charlotte always great
to talk to you great and once again I’m
Charlotte McLoud with investing news.com
and this is D earthley with Junior minor
junkie thank you for watching if you
like this video make sure you subscribe
to our Channel we’d also love to hear
your thoughts so leave us a comment
below we’ll see you next time
[Music]

David Erfle of Junior Miner Junky shares his thoughts on gold, explaining what pushed it to record highs, why it’s now consolidating and how high it could go in 2024. He also discusses silver, including what it will take for the white metal to get past US$30 per ounce.

This interview was filmed on April 24, 2024.

#Investing #Gold #Silver

0:00 – Intro
0:29 – What’s driving the gold price?
5:57 – Stock market starting to crack
9:05 – How gold could hit US$4,000
12:51 – Gold price outlook for 2024
15:48 – When will gold stocks move?
19:06 – Where David is focusing now
22:14 – Get into a bull market mindset
27:29 – Outro

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