Dave Erfle – Precious Metals Pullback, Key Levels To Watch For Gold, Silver, GDX And GDXJ

Dave Erfle – Precious Metals Pullback, Key Levels To Watch For Gold, Silver, GDX And GDXJ

hey everyone welcome in to another daily editorial here on the K report chatting with Dave fle going to be focusing again on the precious medals and bit of a correction that we are seeing again heading into the FED meeting tomorrow with gold down about $50 Silvers down right around a dollar we’re actually seeing weakness in almost every sector out there with the broad averages lower the rest of the Commodities lower but again the focus on the precious medals Dave is the editor of the Junior minor junkie newsletter which I will link to below Now Dave looking at this correction it’s a I guess bigger number on the screen when you see gold down over 2% silver down 3 and a half% GDX gdxj down over 4% fact of the matter is though the prices are still generally higher they haven’t broken any support so what are you seeing in a day like today where it’s I believe another correction but again no support being broken right now yeah this is know some profit taking ahead of the FED just in case they say something that the market doesn’t like you know you’ve had the 3250 in the GDX is is strong support you’ve had two consecutive bullish weekly hammers off that level and then the gdxj it’s the 40 level you had two consecutive weekly bullish hammers so it’s consolidating in a high consolidation you know became overbought so it’s working off that overbought by trading sideways a bit while the gold price is doing the same thing it’s it’s consolidating in $150 range between the 2450 all-time high it reached a couple weeks ago and uh the low of 2300 that it’s retesting again today so that’s really healthy especially when you know when you when you consider the fact that um the ceasefire in Gaza you know honestly I thought the ceasefire lasting longer would would take the gold price all the way down to at least 2,200 so I because I thought there was more of a of a war premium in the gold PR but that’s not the case it’s holding 2300 so that’s nice to see as as we go into this fed meeting you know there’s always a lot of volatility around that if we do break that 2300 in Gold though you do assume that it would go back and test that 2200 level right well I think that’s a possibility the 50-day moving average is is rising towards that uh 2200 level I think I think it’s right around there now it’s going up pretty quickly so by the time that the FED speaks it’s going to be you know closer to 2220 I think um yeah it’s a 2222 right now so by the time the FED speaks it’s going to probably be around 2235 right around there so the gold price coming down to to test that would be you know healthy and normal so I wouldn’t be surprised to see that if if the FED says something that gold doesn’t like now what about silver silver down about a dollar today but it’s still hanging out above $26 an ounce which is look generally higher than that trading range it was in where 25 and change seemed to be that sticking point for well over a year is it important for silver to hold about that 25 and change level yeah Silver’s uh 50-day moving average is is rising pretty sharply too and it’s about 2560 it’ll probably be around 2575 by the time the FED opens its mouth so there’s an open Gap open upside Gap at 26 because that 26 level was really strong resistance for for for a couple of years and it gapped up there and ran quickly to to to almost 30 so I wouldn’t be surprised for it to come down and fill that Gap after this after this looks like this bare flag is breaking down so yeah I wouldn’t be surprised to see that either now what about the stocks too look at something like GDX and it’s another down day here but again timed almost perfectly with the beginning of last week where it bounced back quickly GDX seems to have set up support right around that 32 and change level which was resistance is that the other level that we’re looking at for GDX at 32 range yeah that 32 3250 that like that that was that was strong resistance going back a couple years and now it’s it’s be it’s trying to become strong support on the gdxj that level is 40 so like I said we’ve had two strong weekly hammers from from that level back-to-back weekly hammers so you know it depends on how the market reacts to what the FED has to say here we could see it come down to test and have have another weekly Hammer off that low I mean they’re they’re working off overbought levels too uh RSI the daily RSI is is is remaining above 50 it’s about 53 right now as it corrects that not lower so I think um I wouldn’t be surprised to see that level hold but it could come come down below also and there’s more support at that 31 on GDX so it’s going to be interesting as it always is uh fed oh yeah it is fedspeak but bigger picture concept here with GDX really at the upper part of its range and this range that’s been in place for pretty much two years do you want to see it simply just sideways consolidate around here for a prolonged period of time to potentially set up a higher level or is there some other chart pattern formation that you would like to see here that maintains this more bullish Outlook yeah I’d like see those levels 3250 and 40 maintain and you know fed beak might even be a nonissue a bigger issue might be the employment report right that’s come that comes out Friday because we we’re we’re starting to see major signs of of stagflation you know we saw the we saw the very disappointing GDP growth rate is only 1.6 after being 3.4% Q4 and at the same time inflation’s not only remaining sticky but it’s it’s rising again so those are two major components for stagflation of course the third major component is a weak job market you know even though the the last uh month’s jobs report was strong uh it was US government hiring that that created most of the jobs and uh you know the private sector continues to show weaker weaker growth and there’s and there’s been a lot of layoffs so I wouldn’t be surprised to see a a weaker jobs report on Friday and that could have a stronger effect on not only gold price but on the stock market as well so are you concerned at all if the stock market sells off which it did start this month week and then it started to come back took about 50% of those losses from the first couple weeks off the table might be rolling over again do you worry that weakness in the US markets bleeds into the precious metal stocks well last week that wasn’t the case was it we had we had this gold price down a couple of percent and we had the the the stock show strong relative strength to the gold price and continuing to show strong relative strength to the stock market as newmont’s blowout quarter led the the S&P Leaderboard on on Thursday it was it was at 12 and a half percent on Thursday a lot of people don’t realize that Newmont is not only the largest gold Company by far now but it is also the only Gold stock on the S&P 500 so if you start to see numont continuing to outperform the S&P 500 that’s going to bring that’s that’s going to finally bring some more Western investors into gold stocks and Then followed by numont we had that now the number two gold miner is not baric anymore it’s it’s now a ni they also had a blowout quarter so that that that’s that’s showing that that’s having the Gold stock start to to outperform the stock market so if we do have a a big hit to the to the stock market tomorrow um we might not see the big hit in Gold stocks if the gold if if gold is affected positively by what the FED has to say yeah some of those earnings from the majors were good and encouraging to see the higher volume trades and the up moves we saw now just let’s hope that they don’t give them all back because they have trended lower after some of those reports Dave what does this mean for this rotation trade though because it is what we’ve seen within the markets is money rotating from one sector to the other seems like for the last two months now it’s been the commodi turn do you get worried that this rotation trade could end or is it just getting started in your eyes yeah I think it’s just getting started you know it’s it’s it’s not a coincidence that the that the gold price had a technical breakout on the last day of q1 at the same time the stock market hit its high so the stock market has rolled over at the same time the gold price has had a technical breakout and had a $450 move to the upside in two and a half months that $450 move to the upside in such a short period of time is being Consolidated now as it as it needs to be and it’s a healthy consolidation it’s consolidating like I said in the $150 range after moving up so so far so fast and if you look at the S&P 500 it lost its 50-day moving average for the first time since early November of last year it went up 22% from November so after it lost its 50-day moving average it came down pretty far below it and now it’s bounced back and it’s back tested that 50-day moving average just started to roll over again so it’s going to be very important what happens this week in reaction to not only fed speake but the jobs report to Follows it on Friday what about within your portfolio you don’t need to comment on individual companies but we have seen more news there’s been more financing news which I think has been a bit of a mixed bag some companies raising money that they need other companies not being able to close financings in that quick time period that you like to see we have gotten some more news on work programs for this year but we’re practically in May this is very late we’ve seen limited drill programs too so what are you watching out for news flow wise from either companies in your portfolio companies that you’re watching that you think would be positive news for investors and for the stock yeah I’m I’d like to see more strategic financings we’ve seen a couple I’d like to see more that’s always a positive sign in the market when you start to see strategic financing from these majors and mid- tiers taking a chunk of of these companies and um that’s that’s always a positive thing um you know as far as my portfolio I’ve had I’ve had several continue to outperform and B for Kate and then I’ve had several not really haven’t really done much and haven’t really moved very very much but have started uptrends but we you know you’d like to see more m&a we’re starting to see that that’s good but you really want to see that financing window open wider sure it’s opened a little bit you started you started to see some some quality projects get get some big financings but a lot of them are still uh really small and they don’t really move the needle that much so we’d really like to see that financing with they open wider yeah so true we would and the companies obviously want that as well Dave one final question and it’s something that I’ve heard from some investors that they’re looking at smaller miners especially silver miners now that the price moved up into the high 20s even challenged that $30 level where some of these miners can become profitable which is a big change from these mins they’ve been running that just kept losing money year after year after year do you get excited about these kind of moves do you think there’s an investment angle here if silver can stay high where these small miners can actually start generating some cash flow and potentially really move their stock well not really because I’m in this space for for takeovers you know for for big upssize gains and and multi-baggers and those come from companies that are drisking large projects that become attractive to Majors they T take a Strategic investment and then we have another major maybe take a Strategic investment and that gets some some some competition inside the stock and maybe if there is uh an ultimate takeover offer there might be a bidding war so I like to I’m I’m still attracted to projects that look attracted to majors in mid tiers I’m not really interested in small companies with small projects that don’t look attractive to these larger companies that need to replace their ounces okay hey Dave thank you very much for addressing that as well always great chatting with you there’s a bit more to talk about today although it’s due to a correction but again no major support has been broken here this very well could be a consolidation move but again only time will tell some of these stocks are fading so could be an opportunity if this bull market continues to have another entry point because some of the stocks while they have moved still could have a lot of upside here but again very very stock dependent Dave thank you again and everybody you want to follow along with Dave visit the junior Miner junkie website which I will link to below Dave we’ll chat next week have a great rest of your week there buddy you too Cory thanks again

As pretty much every market is red today in this segment I focus on the pullback in gold, silver and the gold stock ETFs, GDX and GDXJ. Dave Erfle, Fonder and Editor of the Junior Miner Junky joins me share his outlook when it comes to prices for the precious metals and the equities.
 
We outline key levels to watch, that are currently support, and how the upcoming Fed meeting and jobs data could be the next catalyst.
 
I also ask if broad market weakness could impact the metals equities as well as the news Dave is looking for to drive individual stocks higher. We wrap up with a comment on smaller silver miners and if Dave is looking at investing in these stocks now that the silver price is in the high 20s.
 
 
Click here to visit Dave’s website – The Junior Miner Junky – https://www.juniorminerjunky.com/

Timestamps
0:00 – PMs Tuesday correction
2:08 – If gold breaks $2,300, is $2,200 next?
2:51 – Does silver need to hold $26?
3:43 – GDX 32-32.50 range, GDXJ 40 level
5:02 – Chart patterns to watch for GDX and GDXJ
6:30 – Does US market weakness bleed into PM stocks?
8:02 – Rotation trade into commodities
9:39 – Portfolio comments
11:16 – Small silver miners, possibly starting to make money, investment angle
.
.
Listen to the podcast on our website: https://www.kereport.com/
.
.
Follow us on social media:
🔗 https://twitter.com/TheKEReport
.
.
Disclaimer: The content in this podcast is not intended to be financial advice. It is meant for educational and entertainment purposes only.
.
Managed by SmallCap Communications: https://smallcapcommunications.com