Dave Erfle, Founder of the Junior Miner Junky, joins us review the turn in sentiment and direction in the general markets and precious metals sector the middle of last week when more systemic financial weakness reared it’s head. We saw silver and the PM mining stocks take off the middle of last week more aggressively than even the moves higher in gold, when The Bank of England pivoted to ease the economic pressures in their markets, a little over a week after Japan just did the same thing. This reversed the trends of the Pound and Yen, pressuring the US Dollar lower, and boosting markets.
Then we saw the news over the weekend regarding Credit Suisse’s weakness and the concerns of a contagion affect in the banking sector. Some market participants came to see this as evidence that there is not much more room central banks have to keep hiking rates before something major breaks and then they’ll need to reliquify markets. Once again, speculators are betting that Fed pivot is becoming increasingly more likely by the beginning of next year.
As for the precious metals sector, it was promising that silver and we look at some technical resistance levels Dave is watching for in GDXJ, gold, and silver, as we head into this week’s close. Dave also highlights a number of clues and tells that we were getting near a bounce at the beginning of last week with so much bearish sentiment, where both the gold to silver ratio and the gold to S&P 500 ratio were at technically, where the BPGDM Gold Miners Bullish Percentage Index was at such a low reading, and the COT positioning in bullishly contrarian set up. Ultimately though, Dave wants to see a move above $52 in Newmont, as a key bellwhether stock, to gauge generalist investors appetite for coming back in the gold stocks.
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Cory and I are attending the upcoming New Orleans Investment Conference on October 12-15. We’d love to see you there! It’s a great way to meet company management and spend some time in New Orleans. Click the link below to register and please let us know if you will be there so we can meet up.