Dave Erfle, Founder and Editor of the Junior Miner Junky, joins us for a review of the technical setup in gold and a deeper dive into the different subsectors and stages of the gold mining stocks that have his attention moving into 2024.
We start off outlining the lack of news in the PM equities sector, and the mild pullback we’ve seen in the precious metals, and really most market sectors, for the first week of 2024. This is after a several month rally across the board in markets in Q4 of 2023, where a number of new highs were achieved. One of the areas we hone in on is that gold has been holding around and above the key psychological price level of $2000 for the last few months. Holding above $2000 for a longer period of time may be starting to change attitudes and sentiment to this level being more of a floor of support moving forward, versus the ceiling it’s been the last 13 years.
We then shift over the gold stocks where we highlight that with inflation coming down, and costs starting to moderate, while the metals prices have moved higher, that we may be transitioning from the narrative of margin contraction over to one of margin expansion. This leads into a discussion of if the producers that are making good money with current margins may lead to an increase in mergers and acquisitions in the year to come.
Dave then breaks down which types of PM mining stocks he has been positioning in within his portfolio. He has not really been focused on taking the extra risk on explorers because the vast majority of them are not getting rewarded and have pulled back much harder over the last 2 years, and haven’t participated as much in the rallies. He is more focused on the optionality of the developers with solid projects and management teams that have defined value and ounces in the ground, as well as core position of smaller growth-oriented producers.
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