Hour 1 – Jesse Felder, Doc and Doc Jones – Inflation and Commodities
Om this weekend’s show I spend the first hour on inflation outlooks and commodity investing. A couple key events this week drive home the inflation (or stagflation) narrative. When it comes to commodities we start with precious metals and make our way to base and battery metals.
In the second hour we have the replay of the recent webinar where I was joined by 5 mid-tier royalty companies to discuss the ins and outs of investing in royalty companies.
Please keep the emails coming to Fleck@kereport.com. I love hearing from all of you.
- Segment 1 and 2 – Jesse Felder, Founder of the Felder Report kicks off the show with a discussion on recent inflation data and it’s impact on commodities. We look ahead to the key drivers for inflation and markets.
- Segment 3 – Richard Postma, AKA Doc is back to update us on his technical outlook for gold, gold stocks and silver. We recap the price moves in the month of April and what it means for May.
- Segment 4 – Doc Jones wraps up the first hour with his thoughts on the battery metals sector. We discuss nickel, copper and zinc. All of which have differing drivers and projections.
Exclusive Company Interviews This Week
- VanGold Mining – Closing the El Cubo acquisition with production by the end of the year
- Pure Gold Mining – Production and Exploration update – Commercial Production expected shortly and a large drill program focused on growth
- Maverix Metals – An overview of this established Royalty Company with over $50mil in revenue from 2020 and upcoming catalysts
- Calibre Mining – Q1 Gold Production recap and updates on the the drilling at 2 Projects, one with Rio Tinto as a partner
- TriStar Gold – PFS and drilling updates, a 20,000 meter program starting next week
- Kodiak Copper – A fully financed 30,000meter drill program and the acquisition of the Axe Copper-Gold Property expanding on the MPD Property
- Bluestone Resources – An overview of the move toward production at the Cerro Blanco Project in Guatemala
- Montage Gold – A 3.2mil oz gold resource at the Morondo Gold Project with a PEA coming out within 1 month
- Newcore Gold – News on increasing the current drill program to 66,000meters and further drill results
- Great Bear Resources – Recent stepout/stepdown and infill drill results that continue to return consistent high grade gold results
Doc sounds like your not thinking a retest of 1680. Will this double bottom turn out to be the final low.
Are you in camp that gold won’t see 2500/3000 until 2023.
Good morning, Paul.The odds are we retest the 1680 lows and if we do I’ll be able to more accurately assess whether I think we take that out. My gut tells me we do (also the long term technicals). Absolutely, gold doesn’t see 2500/3000 before 2023. From the highs in 2012 it took us 9 years to hit the current highs—-now we’re below the 2012 highs and will be for some time. The good news is that I feel the time frame between the high of 2020 to the next high will not match the one from 2012 to 2020—it should be a much shorter time frame based on what I’m seeing. However, we have (and are) starting to form the next solid base for the next move higher which should really be “an exceptional one”. This is the time to be patient and over the next few months to add to positions and take new positions.
Doc – I’ll be ready to deploy my remaining dry powder if/when we get the pullback going into May, and looking forward to adding to a few of the high quality names if they go back on the clearance rack. I’m much more fully deployed at this point than you are, so I’m considering raising a bit more funds to supplement what I have set aside, but if the metals were to keep rallying instead of pulling back, that would be fine with me.
Keep up the great work sir!
Doc.. great segment and very impressed on your accurate KTN. call.You had mentioned a couple weeks ago that MON-V. was starting to look interesting.Wondering if it still is on your watch list?
Ann, thank you. I’m getting ready to add to KTN and I believe we’ll be able to acquire it between $.20 and $.25. There’s no hurry since usually when you break important support levels an asset doesn’t bounce back right away. Yes, MON.V is looking very interesting based on technicals—-I’m going to start to do my due diligence now on a fundamental basis to see if I would like to purchase some. I believe that the stock will test the $.15-.20 area—if I like it on a fundamental basis I will probably purchase it there—as usual I’m not recommending that anyone buys it based on what I’m doing.
Good thoughts Doc, and thanks for sharing your outlook and price targets to watch on the PMs.
Needless to say, I will be surprised if KTN hits .20 or, for that matter, my .25 worst case that I mentioned the other day. So, of course, I bought more yesterday.
It plunged after my “single close at .295” was achieved and silver did weaken…
On April 28, 2021 at 4:15 pm,
Matthew says:
Maybe. Today was a small breakdown of sorts with the lowest daily close since late January so I’d watch for a single close at .295 or lower. Silver will probably have to weaken for that to happen.
https://stockcharts.com/h-sc/ui?s=KTN.V&p=D&yr=0&mn=11&dy=0&id=p06090326388&a=946952729
It is at a big “618” Fibonacci support and, on the non-log chart, there’s nearby speed line support…
https://stockcharts.com/h-sc/ui?s=KTN.V&p=W&yr=5&mn=6&dy=0&id=p40406751571&a=708378089
On my preferred log chart, it is already at Fibonacci fan support:
https://stockcharts.com/h-sc/ui?s=KTN.V&p=W&yr=5&mn=6&dy=0&id=p43473237691&a=946990113
We also potentially have a huge bullish cup and handle pattern.
Impact silver also took a hit on Friday—the price action of some of these junior silver miners is probably warning us about the pricing of silver in the near future.
Even though I’m overweight Impact, I’d like to add more if Silver and the Silver miners do pull back down in May.
I believe that this year’s exploration focus from Fred and the IPT team could be transformative.
That’s true but it appears to have been a lone investor capitulating since the break was due to one trade of less than 145,000 shares (possibly much less) with less than 2 minutes remaining for the day and week. OR, it was a big player painting the chart to either shake people out or put an end to the decline that is technically convincing, maybe both.
I could probably get the exact size of the trade from my trading platform but not stockcharts since 1 minute candles are the smallest they offer.
IPT touched its 100 week MA for the first time in over a year and managed to close the week above an important speed line support…
https://stockcharts.com/h-sc/ui?s=IPT.V&p=W&yr=5&mn=6&dy=0&id=p45297895585&a=930586384
Glad I bought more IPT and KTN on Friday’s dip!
Bought more today, too, btw, along with Scorpio Gold.
Restructured. Comments greatly appreciated.
Saturation:Metals – https://tinyurl.com/wmhb85ts
Saturation:Markets – https://tinyurl.com/yu68t62j
Jesse’s thoughts on inflation are as good as they get IMO. However, there is another school of thought, namely we’ll never see any inflation again. Note the following interview on Kitco: https://www.kitco.com/news/video/show/Market-Analysis/3357/2021-04-30/Meaningful-inflation-wont-happen-ever-again–Michael-Lee-Part-12#_48_INSTANCE_puYLh9Vd66QY_=https%3A%2F%2Fwww.kitco.com%2Fnews%2Fvideo%2Flatest%3Fshow%3DMarket-Analysis
Thanks for the show Cory.
Yes, Jesse Felder always does such a good job with his segments, and I agree with his points that inflation will be showing up more and more in the metrics, moving real rates more negative, and with is comment that with all the different currents swirling around with central bank monetary policy and the unparalleled government stimulus spending that “he can’t own enough gold right now”.
As for this Michael Lee on Kitco suggesting we’ll never see inflation again, that is pretty absurd. Has he had a look at lumber prices, Oil prices, Copper prices, Nickel prices, Zinc prices, Soft Commodity Food prices, and energy prices lately? They are already inflating…
Heck, even in the warped and masked government CPI readings they moved up to 2.6 in the March report, so it is going to be hard to put a lid on Inflation soon.
I agree with your comments on Lee’s assertion on inflation. However, he sparked some discussion which was my point on posting his interview. On top of the cost of materials, shortages are developing. Chips in particular. Ford has cut some production lines because of the shortage. Can’t imagine why they still waste money on advertising!
Good points Silverdollar, and thank you for posting his thoughts, as it does lead to interesting discussions. I often will post things from pundits that I disagree with, as this does more to crystalize one’s thinking than just an echo-chamber. Sometimes I post things where I don’t have a definitive opinion on, but have good points on both sides of the discussion to consider, just to see what thoughts others have.
For example, I thought both Michael and Frank had a few good points, and few silly points in this debate over at Stansberry, but it has had a number of comments on the video on YouTube, and out on other investing sites like stockhouse, ceo.ca, and fintwit.
I realize this debate has been raging for a decade now, but just curious what thoughts others have, AFTER WATCHING the debate between these 2 titans.
It’s long, so grab some popcorn…
___________________________________________________________________________
Bitcoin vs Gold: The Great Debate with Michael Saylor and Frank Giustra
Stansberry Research – April 22nd
“It’s the showdown that everyone has been waiting for. Gold financier Frank Giustra versus MicroStrategy CEO Michael Saylor in the ultimate gold vs bitcoin battle. Our Daniela Cambone moderates.”
I haven’t heard Guistra speak on gold much but Saylor is no titan based on the idiotic things he has said about Bitcoin and gold.
To compare assets that are at opposite ends of the risk spectrum is just plain silly and a waste of time. In this world of centrally planned/crony (anti-competition/anti-free market) economics, a better case could be made for Amazon stock instead of gold than Bitcoin instead of gold.
Well said Matthew re bitcoin. I trust all goes well for you and yours. Best, Andrew
Thank you Andrew, it’s always good to “see” you here. Best, M
“We’ll never see any inflation again”—-pretty dangerous statement.
Agreed Doc.
Dangerous and already wrong.
Mainstream media does have an impact to people’s way of thinking. It is getting weird to say the least. Inflation is here and more is coming. Notice the huge merchandise trade deficit with rest of the world? It is to say that the goods we sell come from other places. This to a large degree covers up the fact we are seriously lack the productivity supporting a balanced supply and demand structure which is required to keep inflation low. This balance will be broken because it is not sustainable. Once rest of the world says that we have enough paper and we need real thing, things will change and huge inflation comes at once. We can not take as grant that the trade is always one sided, coming full load and return empty.
Dragonite, I agree.
As an interesting observation, it is neat that we have both Doc Postma and Doc Jones featured on this KE Report Weekend Show. Both are class acts and great minds, so it is wonderful to have these two gentleman sharing their insights with us.
I propose we set up a segment called: Dueling Doctors!
We could have Doc Jones mention some of the companies he feels have good fundamental merits, and then Doc Postma analyze their technical set up.
Just a passing thought for this weekend!
Ever Upward!
Ex, that’s a very interesting thought—also, it could be Excelsior in place of Doc Jones.
😉
>> Doc, I may take you up on that sometime in the not-so-distant future…
It will be like skeet shooting. I’ll start tossing up companies I like, and you can shoot them down with the technicals, reminding me I often get excited and buy too early. Haha!
Resource Skeet-Shooting with Doc Postma & Excelsior: Episode #1
– Argonaut Gold
– Endeavour Silver
– Impact Silver
I’ll toss out why I like each company from a fundamental basis, and then you can use technical analysis to let me know:
A) You missed the move, and it’s heading higher
B) Partial hit, you are shooting it down in the short-term, but are longer term bullish
C) Direct hit, you are shooting it down for the medium to longer term
How’s that for a show segment idea? (LOL!)
Resource Skeet-Shooting with Doc Postma & Excelsior: Episode #2
– Caliber Mining
– Alexco Resources
– Silver Tiger
Resource Skeet-Shooting with Doc Postma & Excelsior: Episode #3
– Aris Gold Corp
– Wesdome Mining
– Silvercorp Metals
I’ve got plenty more for segments 4, 5, and 6. Haha!
Ex, I have recently sold some Cameco and bought more NXE as it appears that NXE has a world class reserve. I am not sure when uranium will rise but it seems that nobody is producing because the price is low. Hope more users will sign long term contract since it rose to upper 40s according to Mr. Rule. Otherwise one day they will find they have nothing to burn. The spot price is really illusive.
I also bought quite big PHYS and CEF this year. I hope we get over this period of price price suppression by the big banks. I feel that there is no way to keep the price down since inflation keeps the cost up and lower ore grade adds to the tightness. The fact that silver price and palladium price jump were allowed means the supply will dry up otherwise. It seems last year governments were more focused on fighting the virus and refrained from importing more gold. Since now we get vaccines and also we know more about how to deal with COVID 19, things will return to normal later this year or next.
Hi Dragonite. Good to hear from you, and yes, NXE Nexgen had discovered and developed a truly Tier 1 world class Uranium deposit, and it will be eventually an economic mine. As to which of the big boys will eventually take it over (Cameco, Rio, BHP, or even a JV with another Energy conglomerate), that remains to be seen.
Some folks thing both Fission’s Triple R and NexGen’s Arrow will be developed in tandem, but I don’t like all the water issues Fission will have to deal with, and NexGen doesn’t have any of those concerns, and is the superior stand alone project for someone to acquire. It is also possible, although less likely, that they try and source their own team to take the deposit into production.
A few years back, I was pounding the table on NexGen as people had lost interest in the Uranium sector, and thus it’s valuation had pulled back down to very attractive levels. However, over the last year much of the expected re-valuation has already happened, and for where things are at currently, NXE is more fairly valued at present prices. l As a result, I’ve lightened up some on my NexGen position, to get into earlier stage companies, or others with more room to run to the upside. I still have core position in place though, because, when the spot contracts get renegotiated with Uranium producers (likely in the high $40’s to low $50s to start with), then that will move the term pricing up suddenly, and will give Uranium stocks a second wind, to build upon the eye-popping gains of 300%-1000% that over a dozen of the main companies in the space just saw over the last year.
Until then, the Uranium sector looks a bit overbought, so it is odd that Rick Rule just stated that now he is ready to position in Uranium stocks more aggressively over the next few weeks. (??) He’s been talking about Uranium for a decade, so where the heck was he getting positioned back in late 2016 and then again in late 2017 when Uranium prices double-bottomed at the $17-$18 level? That was the time to have been taking out big positions, not now, after they’ve already 3-10 bagged and are still overbought on the charts.
Personally, I’d like to see the Uranium stocks pullback down by 20-30% before putting any more capital to work, but I’ve already 7 stocks in place and have been in position for a while and had a great run along with the other Uranium bulls from 2020 into this year. I pulled some profits in mid January and again in March, and would like to add to some, but most are still hovering close to their highs, and many of the stocks got a bit ahead of themselves pricing in a big piece of the re-rating in U308 prices already. Markets are forward looking, but in the last 12 months, many stocks have already front-run the pick up in prices. I still believe many of them can go up 2-3 times from here, but the easy money in the sector and rerating many were waiting for just played out, and one had to be in it to win it.
Ever Upward!
Thanks Excelsior. After you mentioned NexGen a few years ago, I bought at 1.8 – 2.0 Canadian Dollar range. When it went up, I had been waiting. A week or two ago, I saw Cameco rose and NXE dropped , I sold some CCO at 21.x Canadian dollar and bought NXE at 4.50 cad. If it comes down again, I will add more. If it does not, I feel I have enough. Cameco made some money for me. I bought it low.
Thanks a lot for your advice. I also sold a lot of U stocks a couple months ago. I am not regretting.
Great job trading Dragonite. That makes sense on the Cameco rotation into NexGen on the pair-trading, as did taking a few profits a few months back. I’m looking for more of a pullback before adding more, but have plenty of Uranium stocks exposure if they just keep running.
Hi Ex, I’m glad you didn’t mention dueling banjo’s, I am trying to stay out of trouble but it’s hard. As far as inflation is concerned it has been baked in the cake here for many years. DT
Deliverance – Dueling Banjos
What a great idea, ex picks critique from Doc.
I would think alot of people would like to hear that one.
That could become very very popular if done weekly, even monthly it would become the most listened to segment.
Dont forget Mat would be good too.
Thanks for the vote of confidence b. Maybe Doc & I will do something like that at one point if people would be interested.
Maybe a 3some? Matt=Doc-Ex
I would say the current inflation we’re seeing is more of a “demand pull inflation” which if supply lines start to open up will reverse—-this is probably what the Fed is realizing. The only way we get broad consumer based inflation outside of asset inflation is through “cost push inflation”—this type of inflation is hard to stop and often the result of significant wage increase where demand overwhelms supply from the aspect of wide spread velocity of money. Also you would expect bank lending to increase considerably which is not happening today.
I agree with that Doc. Cost Push Inflation is when we see rising commodity prices, impact other goods and services by pushing their prices higher, and all of this gets paired with rising wages. We are already seeing both influences in the marketplace right now with most commodities ratcheting higher (Oil, Copper at all time highs, Nickel at highs, Palladium at all time highs, Platinum rising, Zinc & Lead rising, Iron rising, Lithium prices on the move higher, and lots of moves higher in the Soft “Food” Commodities…
Even if the US Dollar has a slight bump higher in the near-term, as Marc Chandler outlined on Friday’s blog, up to maybe 94-95, ultimately the greenback has a destiny to test recent low around 89 and then plumb lower lows likely in the 83-85 range. That will only inflate the commodities even higher.
On the other front businesses are needing to raise wages to stay competitive, and the turkeys in charge start forcing through mandatory $15 a hour minimum wages, it will only spike inflation higher. Many states are already proactively ramping up minimum wages in a staged approach to prepare for that eventuality.
All of this is leading toward “Cost-Push Inflation.”
Ex, I agree we may get a short term bump in the dollar but don’t think we get as high as 94-95. I think there are VERY good odds we take out the dollar lows of early 2018 sometime in the second half of the year.The dollar is currently looking very weak to me —-I have to emphasize “currently”.
That makes sense to me Doc. Another greenback bump, before the inevitable slump.
Another worrying short term aspect for gold is that the month did not close itself out in a particularly strong manner.
The big gold miners have shown far more strength than gold over the last two months which makes perfect sense under the circumstances. But it is due to that strength in the miners that I think gold will soon confirm the bullish message of the miners with a breakout of its own. Ironically, that breakout might be taking its time because of big money pair-trading bulls shorting gold and buying the miners. In this big new inflationary environment, gold (the first mover, canary in the coal mine) is likely to underperform the gold miners massively and to a degree not seen in several decades.
I bet the breakout will happen next week based on the very subtle, brand new weekly MACD and TSI buy signals that were just generated with yesterday’s close…
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=2&mn=2&dy=0&id=p10087035165&a=931873171
Interesting thoughts to consider Matthew. I do like that the Senior gold producers, senior royalty companies, and GDX have been early movers, showing that generalist investors are starting to get a toe hold in gold stocks once again.
Good thoughts Matthew. Whether you are proven right or wrong, I want to commend you on your wording in your prediction ie; “bet” and “will”. These words imply a strong assertion and definitive choice instead of the classic “fence sitting” and abit each way type sentiment.
Ozibatla, so far, so good!
P.s. – I try to convey my thoughts precisely so if you catch me riding the fence, it’s because I must based on a lack of certainty.
Mathew, hope you are right. But If price gets weaker next week, I will add more PHYS or CEF. I have been adding since January.
I noticed that the longs get so frustrated with the relatively small correction. Compared to 2013-2015, it is nothing.
I like what I see and it would be no big deal if gold were to drift down for the next few days but I have a feeling it won’t or at least not very much.
https://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=0&mn=11&dy=0&id=p60742323405&a=897433489
Of course, I am partial to the miners and GDX is probably now heading for at least 39.
https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=11&dy=0&id=p52521369738&a=938677308
If it means anything at all, my account just past the highest level it has been at since the alternating day scenario started months ago. It could be a breakout of my upper channel or putting a value on my Great Bear royalty shares. I am hopeful but not convinced yet.
Hi Matt,
Ramb is leaning towards the resumption of the next impulse leg at some point in the not-so distant future. He bought lots of stuff two weeks ago and likes the charts on many including Yamana, Alexco, B2, Arganaut and more….
We are also starting the first trading day of the month on a firm note up. Lets hope Doc’s scenario does not play out and the party resumes soon. I don’t expect the next ride up will be as predictable as some think.
Hi Confused, thanks for the update on Rambus. I think he’s right this time!
Thought I’d repost my own post as I see posted it on a Thursday link and made it Friday afternoon…..
Another busy week for the wolfster. Appreciate all the info being shared so I will quickly add that anyone interested in the black wolf copper it will be releasing drill results next week….for uranium buffs here’s a great interview with Rick Rule about it. https://m.youtube.com/watch?v=UIWGmrnYJFI
No uranium mention by the Wolfster would be complete without the latest interview from the ceo uranium royalty and also executive VP of UEC
https://m.youtube.com/watch?v=xSlxPQLH7Kk&feature=youtu.be
Damn it. Having trouble posting again
Here’s Mr Melbye full bio. Follow good management to make moneyMr. Melbye is a 36-year veteran of the nuclear energy industry having held leadership positions in major uranium mining companies as well as industry-wide organizations. He also currently serves as President, Chief Executive Officer and a director of Uranium Royalty Corp., and as Advisor to the Nuclear Engineering Program at the Colorado School of Mines. He also recently served as VP-Commercial for Uranium Participation Corporation (“UPC”), and Advisor to the CEO of Kazatomprom, the world’s largest uranium producer in Kazakhstan. Through to June 2014, Mr. Melbye was Executive Vice President, Marketing, for Uranium One, responsible for global uranium sales activities. Prior to this, He spent 22 years with the Cameco Group of companies, both in the Saskatoon head office and with their U.S. subsidiaries. He had last served as President of Cameco Inc., the subsidiary responsible for global marketing and trading activities with annual sales exceeding 30 million pounds U3O8. Mr. Melbye was formerly the Chair of the Board of Governors of the World Nuclear Fuel Market (“WNFM”), and President of the Uranium Producers of America (“UPA”). Mr. Melbye received a Bachelor of Science in Business Administration with specialization in International Business from Arizona State University in 1984.
Uranium participation to be bought by sprott is big
https://www.zerohedge.com/markets/game-changer-uranium-stocks
That is a bold move by Sprott pick up Uranium participation.
It was also a bold move for non-producing Uranium companies like Denison, UEC, Boss, enCore, and the Uranium Royalty Corp to start buying Uranium reserves in the spot market to inventory for future price appreciation. Also, as mentioned above in my comment to Dragonite, it is significant just how much (300%-1000% gains) that the uranium stocks have already run, and on much higher volume than we’ve seen in years.
All of this action shows the big boys are getting positioned for the next leg higher in the Uranium stocks.
This weeks interview with John Huhn
https://m.youtube.com/watch?v=DUGHTtsm7oo
Actually recorded April 19 but not sure I’ve seen it listed before
Dragonite here’s yesterday’s market call segment with Eric Nutell if you want his most recent thoughts on oil
https://www.bnnbloomberg.ca/market-call/full-episode-market-call-for-friday-april-30-2021~2186314
Really appreciated
If this analysis is correct, GOLD is setting up for a deeper correction but first it may rise a bit. I do not like the way PM space is trading right now especially the stocks. Most seniors are enjoying record profits yet stock price is languishing badly. That’s a tell tale sign something is broken. Maybe the gold cartel is determined to keep it down under the iron fist by ALL means. This is not natural and a big red flag.
So far: Alternating day pattern despite good “paper numbers”.
Added to Emerita before the run…
It’s nice to see the Precious Metals push off from the starting block for the week in the green.
Gold at $1794
Silver up to $27.10
Also most of the commodities are still on the move higher. Copper up to all time highs again, Nickel up, Platinum up, Aluminum, Oil is up, and some Soft Commodities are up, etc…
Feels like it is like pulling teeth in the miners. Up is better than down. I am close to selling to pay taxes, so this is a good day.
Bah..humbug…alternating days again
Most of the Gold and Silver miners were in the green today.
GDX was up 3.84%, and GDXJ was up 4.4%, so that is still somewhat constructive.
Silver was really the better mover today back up over $27, and the miners were not yawning with SIL up over 4.3% and SILJ up 5.85%. It was the first trading day after the SilverSqueeze 2.0 kicked off though, and PSLV had a big day adding over 1 million ounces of silver to their fund.
https://twitter.com/Sprott/status/1389364644129693697?s=20
I’ll take these kinds of days, where we get measured moves higher in the Precious Metals, over the opposite slow sideways to down grinding any day.
Hi, EMO, EMOTF Emerita Resources came out with assays, here’s the report : ultra High-Grade: https://ceo.ca/@Drjimjones/emo-emerita-resources-announces-first-assaysafter-winning-6-year-court-battle
Enjoy
Doc Jones
CEO David Gower states they have +400 Million Ozs of Silver
https://youtu.be/EA-WF-Jk9bY
Doc talking about Emerita
https://youtu.be/I6S_ixYMylA
Israel isn’t a good example.