Speaker 1: We're starting to see mainstream interests come into the sector,
and a third consecutive blowout quarter is going to get
these fund managers really interested in this sector, especially if
the stock market starts to.
Speaker 2: Roll over in earnest.
Speaker 1: It's starting to roll over here today, and you know,
investors are going to look for something to rotate their
incredibly huge AI gains into something that is undervalued. And
I don't think there's very many sectors out there more
undervalue than gold stocks. To pipe the gold price being
up thirty four percent this year and trading at all
time highs over twenty seven hundred dollars an hours.
Speaker 3: You are listening to Carrie Letz's Financial Survival Network, where
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Speaker 2: And welcome.
Speaker 4: You are watching and listening to the Financial Survival Network.
I'm your host, Carrie lutz Well gold broke twenty seven
hundred the other day silver silver was up there thirty
five dollars silver just a hair's breath away. Well, let's
find out exactly what's going on, because we talked about
this a couple of months back with David Earfley Junior
Minor Junkie dot com and if you've got a question
with David myself, email kl at Karrie Lutz dot com.
David as always welcome back. So the market's kind of
got new life in it since silver started taking off.
Speaker 1: Yeah, thanks, Kerry. Always great to be on the program
with you.
Speaker 2: Yeah.
Speaker 1: I mean we've been we've been expecting this to happen,
but it's always the timing, right, we just didn't know when.
And sure enough, it was the silver price that triggered everything.
And thirty two point fifty was really strong resistance in
silver for quite a while, and a couple of weeks
ago the gold price had an eighty dollars correction and
finally start and we saw some selling in the miners,
more selling in the miners than you would expect. But
at the time, excuse me, the miners were consolidating in
a bullish flag and a four week bullish flag from
a huge move in early September. In early September, we
saw GDX and GDXJ go up double digits in one week,
so that move had to consolidate, and it was consolidating
there for four weeks, and that during that eighty dollars
correction in the gold price, the miners broke down out
of that flag intra week and ke came down to
test their fifty day moving averages. Well, they moved right
back up into that bull flag and it was it
was pretty much a bear trap. And at the same time,
the SIL and sil J made a fifty two week
high made fifty two week highs that week, while GDX
and GDXJ did not, And this was taking place while
silver was still showing relative weakness to gold. So that
was a little tell that silver was about to break
out because the miners were signaling that silver was finally
about to break that thirty two to fifty dollars ceiling,
and it certainly did the following week we had and
matter of fact, yesterday silver closed at thirty five dollars,
which was the next resistance level. It went up there
really quickly. That's what happens when silver moves in both directions,
it moves really quickly. So and also we've had now
we've had a breakout above that resistance, above that multi
year resistance. When the miners were flagging, they were flagging
below multi year resistance and forty in the GDX and
forty nine and the GDXJ, and they broke out simultaneously
with the silver price. See when you've seen basically you
saw that gold move. When gold broke out about twenty
one hundred ran to twenty five hundred, it did not
take gold stocks and the miners with it. Gold stocks
and the miners continue to lag. I think the reason
for that is that the major reason for the gold
price breaking out was central banks buying gold, and central
banks don't buy gold stocks and they don't buy silver,
so those were lagging. So we needed we needed basically
the miners to break out of those strong resistance levels
at the same time as silver was breaking out of
the strong resistance.
Speaker 2: And that's indeed what's.
Speaker 1: Happened, and it's also brought in a lot of mainstream
activity into into the gold price. You've seen now you're
seeing West investors buying gold ETFs, even though that China
has stopped buying for the past five months. You see,
when the gold price got too high, China stop buying.
They were buying when it was cheap, and now the
Western investors are pretty much taking up that slack for
the past five months.
Speaker 4: So I guess the question everyone's asking is, now that
we've had these breakouts, will it will gold and silver
again seek to frustrate the majority of investors like they
always do.
Speaker 2: Well.
Speaker 1: I don't see that happening. I see weakness continuing to
be bought now that these strong resistance levels are trying
to become floors, especially now that you're finally seeing some
mainstream retail investment coming into the sector. That was the
big thing that was lacking in this sector was that
the main was basically retail who left this sector about
twelve years ago. When gold breakdown broke down below fifteen
hundred back in twenty thirteen, that pretty much took the
generalists out of the sector, and especially out of the
mining sector, and even more especially out of the junior sector.
The juniors have been wallowing around at really depressed levels
despite the gold price rising to nearly twenty eight hundred
dollars now. But recently we've seen that change. We've seen
since the GDX, GDX and GDXJ broke out above those
strong resistance levels. Last week, we're seeing we're seeing a
lot of juniors do the same, and we're seeing lagging
juniors starting to break out of a strong accumulative bases
at much lower levels. So the juniors still have a
lot of catching up, even though the miners still have
a lot of catching up to the gold price. I mean,
the GDX still has about twenty five percent to get
higher to go to reach its twenty eleven peak when
gold was still well below two thousand dollars an ounce,
But the GDXJ has has about sixty five percent more
to gain since it broke down from its from its
high at one thirty seven back in twenty eleven. It's
still it's still right around fifty four to fifty five
dollars here, So it's got plenty of catching up to do.
And then if you take a look at the smaller
juniors that are that are still that are still well
below that are still basically training at well below where
they should considering where the gold price is, that's where
the real opportunity lies.
Speaker 4: Remember we talked about Neumont last time and the stellar earnings,
and you know, like it still took the market like
two more weeks after we talked about it, even though
earnings were coming up, and we all knew it to
break out, and now Neumont. When we talked, I think
Newmont was forty one or forty two. It's now fifty
eight and it went even higher than that.
Speaker 1: Yes, And speaking of Newmont later today after the close
today here on October twenty third, Newmont's going to kick
off Q three earning seasons with their financial results, and
they're expected to really blow it out of the park
because basically the gold price, the gold price in Q
three average twenty four to seventy seven an ounce, which
is one hundred and forty dollars dollars higher than where
it and then it averaged in Q two and we
had blowout quarters in Q one and Q two in
Newmont and several and most other major mining companies.
Speaker 2: So I expect that.
Speaker 1: Once Newmont comes out with their results today, that'll set
the tone for the rest for the rest of the
sector going into the end of the year. And I
wouldn't be surprised to see Newmont beat expectations and this so,
like I said, this will be the third quarter of
minors eating expectations. So I don't see general as fund
managers being able to ignore this sector too much longer.
And like I said, we're starting to see mainstream interests
come into the sector, and a third consecutive blowout quarter
is going to get these fund managers really interested in
this sector, especially if the if the stock market starts
to roll over in earnest, it's starting to roll over
here today, and you know, investors are going to look
for something to rotate their incredibly huge AI gains into
something that is undervalued. And there's I don't think there's
there's very many sectors out there more undervalued than gold stocks.
Despike the gold price being up thirty four percent this
year and trading at all time highs over twenty seven
hundred dollars an hours.
Speaker 4: And you know Newmont broke the cup with a handle
pattern back back earlier a few months earlier, right, we
were watching.
Speaker 2: That cup with the handle.
Speaker 1: Well, well yeah, I mean, but if you take a
look at the silver price now, that's got an even
more attractive cup and handle patterns. Matter of fact, the
handle has got its own cup and handle pattern from
a from a multi year, a multi decade cup in silver.
I mean, I don't even know if you could consider
it a cup and handle sets it's since it's been
that long. But the silver price is incredibly bullish, especially
when you consider the fact that the gold price is
now finally reached it's it's it's inflation adjusted high set
back in nineteen in January of nineteen eighty, when we
had in gold price have that huge spike ending to
the bull market in January nineteen eighty when it got
to eight hundred and fifty dollars an ounce. Well, the
gold price had yet to reach that level in inflation
in government inflation adjusted terms until just recently. But if
you take a look at silver, the silver price needs
to get to one hundred and fifty dollars to reach
its inflation adjusted price that the hut Brothers took it
to back in nineteen eight.
Speaker 2: Yeah.
Speaker 4: Well, Eric Sprot's saying three hundred dollars silver, right.
Speaker 1: Yeah. Well, you know, I don't know about these grandiose
calls about goal. I saw a number today and goal
of one hundred and fifty thousand dollars. Now you always
see these crazy calls when you see the gold market
really start to take off. I like to be more pragmatic,
and I'll be very happy if the gold price hits
my target of three thousand dollars by Q one of
next year.
Speaker 2: Very likely, very likely.
Speaker 4: So what effect of any do you think the electionists having.
You know, everybody talks about the election, not from a
political standpoint of course, but just just in terms of
markets and is Trump good for inflation?
Speaker 1: Well, it's Gold's got so many tailwinds. You know, you've
got the debt situation, You've got the geopolitical situation. You've
got this contentious US election that's drawing even closer where
you know, it's shaping up to where neither side is
going to accept the result, and that would would create
even more chaos in the marketplace. You know, you've got
on the Democrat side, they're saying that Trump is basically
a felon and if he wins, he shouldn't be president president.
And then on the Republican side, you've you've got the
publicans saying that Kamala is not even a legitimate candidate
because she didn't go through the process. So I wouldn't
be surprised if the result when we do get one
on November sixth or seventh or whatever, it's going to
be that will probably be that will probably that will
probably go and have to be decided in the Supreme Court.
So there's no doubt that the gold price is sensing
all this chaos going on, and it just continues to rise,
and each each time we have dips, their body even quicker.
I mean, we had that that eighty dollars correction lasted
within a week and it was bought right away and
then went right back up over twenty seven hundred and
created I think it's thirty ninth or fortieth daily all
time high since March. So yeah, it's it's really interesting
the way it's unfolding here, and it's kind of scary
at the same time.
Speaker 4: Yeah, a little bit. It'll be interesting to see how
they get out of this mess if they want to. Yeah,
it's a mess.
Speaker 1: It's a very it's a very dangerous situation. I mean, sure,
as gold investors, you like to see the gold price rising,
but for the reasons why it's right, you're not really
happy about.
Speaker 4: Well, then you've got the collapse of China taking place
as well, which you know.
Speaker 1: Right, the stimulus there that they that they tried to
save their market. Yeah, I mean that's that's also keeping
the gold price higher. And then we had Canada come
out today and lower another fifty basis points, so you know,
lower real interest rates. Uh, these geopolitical chaos, you know,
the debt situation which is untenable. I mean, neither of
these presidential candidates even brings it up because there's no
answer for it.
Speaker 2: Yeah, ain't that the truth? Uh?
Speaker 4: Yeah, so to be avoided at all possible costs.
Speaker 1: Right, gold looks just that, the gold chart looks just
looks just like a giant middle finger everything that's going
on right now.
Speaker 4: Yes, it does, Yes, it does. All right, So what
do you think we can look forward to? You said
three thousand dollars gold by Q one of the twenty five.
Speaker 1: Yeah, and you could see silver hit forty dollars. I mean,
it's already hit thirty five. And we're seeing a nice,
little healthy correction today because it went from thirty two
fifty to thirty five dollars in just a few sessions.
But yeah, I mean, and at the same time you're
seeing silver come down and probably test the breakout at
thirty two fifty thirty three. You're also seeing a lot
of these gold stocks and silver stocks that are breaking
out of their huge consolidation patterns from a multi year resistance.
They're coming back to test their resistance. So that's giving
you know, speculators an opportunity to get into these stocks
that have already broken out.
Speaker 4: All right, So the stocks are gonna be active, and
the M and A is also picking up. We've seen
a few major acquisitions take place since we last spoke.
Speaker 1: Yes, I mean, you know, these mining assets controlled by
juniors that provide new gold sources and let and and
leverage to to these company portfolios that need need growth
that they're they're becoming increasing increasingly attractive to the to
these to these majors and mid tiers because you know,
with with all with with with the with the rising
cash flow that they're creating now with you know, with
margins now, I mean, these margins are going to in
Q three are going to be upwards of one thousand
dollars an ounce. So they've already they've already concentrated on
the health of their ballot sheets. They've got healthy ballot sheets.
They've got a lot of cash, they're paying dividends, they're
doing share buybacks. The next thing they got to do
is replace those ounces and there, and they've started to
do that now and m and as really started to
pick up.
Speaker 4: Yeah, and we saw with Newmont in particular, took like
a lot of write offs. They knew this was going
to happen, so they clean they cleared the decks, they
wrote off everything. They're selling all sorts of what what
what they call.
Speaker 1: A lower tier ass tier two assets.
Speaker 4: Yeah, which any mining company out there would give their
I exactly what are what are they thinking here?
Speaker 1: Because well, they're concentrating on higher margin ounces and bigger
deposits with blue sky potential. They're that they want the
best of the best, and but where is it doesn't exist?
The best of the best. It does, and they've got
and they're holding onto the to the to the minds
that that that they feel meet their tier one criteria
that that produce upwards of you know, three hundred over
three hundred thousand ounces a year. They have ten fifteen
to twenty year reserves. So this is this is the
sweet spot. And you know, there's there's not a lot
of those assets around and now that now that the
gold price has really taken off a lot of these
numbers that that that these analysts are are are basing
these numbers on, you know, their fantasy. I mean, there's
no way that I really don't see the gold price
going back below two thousand dollars an ounce. Yet a
lot of these economic studies are still done two at
sub two thousand dollars an ounce. So the market is
starting to price in the fact that, hey, the floor
should probably be twenty five hundred dollars an ounce. So
if you use twenty five hundred dollars an ounce as
a floor, just about every major deposit out there that
has that hasn't that has a late that has a
late stage economic study, makes good money at twenty five
hundred dollars an ounce for you. Yeah, the market hasn't
really caught onto the the you know, the smart money's
caught onto this because we've seen a lot of these
juniors really take off with the GDX and gend XJ,
the late stage juniors with these high margins that are
high margin, especially if they're if they're at the finance stage,
close to the finance stage, they're shovel ready or close
to being shell already out there, they've really taken off.
Speaker 2: But there's a few of them right there.
Speaker 1: Right, there's there's very there's very few of those projects
out there. So so what's going to happen is after
these these these juniors have already brought up so much,
they're going to start, you know, rotating those profits into
the lower tier juniors that that that's still you know
that they still reach that criteria, but maybe they're not
at the finance stage or and they still need some
more de risking, or also they also need more permit
de risking. That's the thing, because some of these projects
are still two, three, four years away from being shovel ready.
Speaker 4: And then the lesser jurisdictions right less secure exactly exactly.
Speaker 1: No jurisdiction is completely one hundred percent safe, but there
are top tier jurisdictions and lower tier jurisdictions, and the
ones in top tier jurisdictions, you know, you say you've
got you know you you've got this multi million ounced
deposit that you're de risking in Canada just a top
to your jurisdiction. And you've got the access to capital
you know you've got, you've got the you've got the
really tight share structure. You've done a great job raising
money at the right times. But you look at the
permitting and it's going to be another two three years
before it gets permitted, because it takes a long time
to get a mine permitted in Canada. Yes, and then
maybe you go over to West Africa to a company
like Cote de Wis, which is a lower risk jurisdiction
and a higher risk area of the world. If you
need to permit over there, you just ask for one
and they give it to you.
Speaker 2: Yeah. Yeah, so exactly.
Speaker 1: And THEA and and Kote de Wa Absolutely they're you know,
and because basically they they take a chunk of them,
they take a chunk of the asset, they take ten,
you know, fifty ten percent of the asset, and they
give you the permit as soon as you need it.
Speaker 2: Okay, got a question for you.
Speaker 4: They were a sponsor of my show years back, and
they were direct they were directly impacted by the last election.
Assume that the former president forty five gets elected. I'm
talking about Trilogy, because they had the permit to build
the road and the moment Your Way Ambler hambled the
big huge contention bane of contention over there, and it's
hit a lot of Alaskan companies. Yeah, I mean because
You're already starting to see these stocks move because it
because it looks increasingly likely that Trump's going to win
the election. So anything that's going to benefit from Trump
winning the election, as far as permitting is concerned, these
companies stocks are already getting a bit higher. And you
know that this time, because he knows how the system works,
he's going to be vicious in getting rid of all obstacles,
like for instance, I mean, this is totally off topic,
and I'm not This isn't my vote of support for him.
This is just a fact of his last administration. It
was taking ten years to get a highway project cleared
through the Department of Transportation in Washington.
Speaker 2: And what did he do.
Speaker 4: He said, if there's no significant federal environmental action, something
like fifty page or one hundred pages will do. But
if there's federal action, one hundred and fifty and you're
getting one person who is in charge of your application
throughout the lifespan of it, at this speeded things up dramatically.
Not to mention the policy of before you can pass
one new regulation, you got to get rid of two,
and that actually turned into twenty. So assume that he
hits the ground running. This could be a golden period
for mining here.
Speaker 1: Yes, I mean it's you know, it's it's no secret
that we need more.
Speaker 2: Metals for this, you know, for this, for this.
Speaker 1: Green movement and this pipe, mean pipe exactly. So you know,
they've got to fast track these permitting timelines. And in
Canada and the US they call them top tier jurisdictions,
but then you know which, which I agree they are
because because of the governments and less confiscation on the
back end. But that frunt end exactly. But the red
tape you have to go through and the timelines you
have to deal with to get these permits is too long,
and they're already starting to address.
Speaker 2: It in BC. Imagine, yeah, exactly.
Speaker 4: Imagine if copper projects get green lighted like Trilogies, which
is one of the best on tape waiting permit.
Speaker 1: They've got everything stet up and is waiting for that permit,
and we.
Speaker 4: Don't even know how much they really have there because
there's multiple deposits that they haven't even gone into because
the market won't price it, so why bother with it?
But there's multiple projects, potential projects a district district right
there that's probably the richest copper untapped copper deposit in
the world or one of the top three. So and
then just imagine that they unleash lithium production, which there's
no real reason to do it, but there's no reason
not to not there's no reason to inhibit any of
these productions, any of these minerals so called crucial ones,
because the state of the art of mining is not
like it was one hundred years ago or even thirty
years ago. You know, we're in a different realm, so environmentally,
it's just the objections aren't real. And imagine they unleash
it and lithium goes down to a fraction and what
it is now, which is a fraction of what it
was a couple of years ago, and all these other
metals that we need, you know, we could see we
could see a major impact here.
Speaker 2: Absolutely. Yeah.
Speaker 1: I mean especially in silver, because silver has been at
a deficit now for four years and you know, it's
just neat, it's it's it's it's required in so many things.
It's it's so it's required in so many more things
now than it was twenty years ago. But it's now
more of an industrial metal that it is a precious metal.
It's required in my safe, in my and might as well.
Speaker 2: I've always held on, you know, I had to. I
had to sell.
Speaker 4: Little gold over the years, divorces, taxes, weddings and all
that good shift. And you know, if that's the first
time I ever cursed in the show in fourteen years,
and it's just the devoce here divorce is so. But
I never sold an ounce of silver and even added
to it in all tame here. Yet the junk silver
that I bought it less than five bucks an ounce
back in two thousand and three, two thousand and four,
whatever it was, I still got it all.
Speaker 2: I'm not touching it.
Speaker 4: And I was a big buyer after the financial collapse
when it was seven to nine dollars announce and ten
and I bought up until the load twenties, which I
never regretted, but not much. In the load twenties, almost
all of it, and the junk silver, I think I
was paying eight nine thousand dollars a bag. What's what's
a bag of junk?
Speaker 2: Now? Oh? I don't know.
Speaker 1: I don't even follow it anymore, but I know that.
But when I bought it it was twenty was junk
was trading at a discount dicund to the Yeah, same
same here exactly. Nope, can't. You can't get discount to
spot at all anymore. There's the premium to spot on everything.
Speaker 2: Now. You know what I bought, I did.
Speaker 4: It was just an exercise for community members to show
that you could be done. I bought war Nichols, maybe
a couple thousand bucks worth, but they're thirty five percent
silver and they were trading it like a twelve percent
discount to melt.
Speaker 2: Value when I bought them. David Hi, Right, it's right.
Speaker 1: Yeah, it's say collecting juniors that are trading it less
than catching the bank.
Speaker 4: Yeah, I mean, like, what are they thinking here is
this isn't rational here? These are these markets are not
behaving rational. And hopefully I'll be alive when they start
trading rationally. And I think we're getting to that point.
And I still got a little life left in me. Yeah, absolutely, yes,
little a little bit, a couple more years hopefully, if
God willing. But but you know, we're not stop clocks here, right,
We're not right twice a day, whether we do anything
or not. This is the result of analysis and understanding
markets that we stood our position.
Speaker 2: Oh absolutely. Yeah.
Speaker 1: For over twenty years, I've stood my position on this
and it's been it's been a long, crazy roller coaster ride.
But I wouldn't do anything different. I love doing it
and I love it educating people on the not only
the value of gold and silver, but basically I'm teaching
them how to manage their risk while trying to make
money in this very risky and volatile sector.
Speaker 4: Volatile sector, but when it moves, it moves like like
no one's business. And just a couple of pointers out
there for you people. If you're buying stuff from people
you don't know, you got to the first thing you
have to do with every coin you.
Speaker 2: Buy is weigh it all right. If it's off by
a bit.
Speaker 4: You know, drop it, do the sound test, and if
you can find somebody with the X ray gun, x
ray it, because that is fool proof.
Speaker 2: You can't.
Speaker 1: Yeah, tungsten weighs the same amount, right, right, Because I've
heard of a silver coming out of fakes rounds coming
out of China, like Northwest Territorial which was the operation,
but they weighed exactly the same.
Speaker 2: But the measurements are off. You're not in a position.
Speaker 4: When you're looking to buy metal that you're going to
be measure it with a caliper and all that. You
just not but you certainly can weigh it. Weigh a
bunch of them at once, drop them and listen to
the music. The musical sound of silver, it's unmistakable. And
get a scanner. Other people have scanners. Scanners work almost
as good as the X rays. But that's just a
piece of advice because no matter how much you trust
who you're buying it from, generally they're going to be good,
but sometimes they get beat.
Speaker 1: So you have to be vigilant for this. And the
generalist investor finally starts to come into this sector more
and more. The scams are going to increase even more
and more. And the fakes, David, are better than ever.
I mean, I could be faked. I mean, and you can't.
If you just go to some guy in the market,
you can't trust them when they say, oh, this isn't real.
You have to go to a real person, a real
coin shop or bullioned dealer, and don't get screwed on
this because you know, like I know, if I buy
from Andy Sckman, I never have to worry. But I
still check and and I weigh it. You know, I
definitely weigh it. If the weight's off, then you've got
to go further. If the wait's spot on, generally you're
going to be good.
Speaker 4: So that's just a warning to you people out there
who have woken up to the wisdom of our ways
and now know that this thing is real and what
we've been telling you me for fourteen years, you for longer, David,
is true.
Speaker 1: Yeah, it's it's it's really starting to happen, and it's
it's you know, this sector is so freaking tiny. It
doesn't take a lot of generalist interest to really started
moving and then buying begets buying, just like selling has
begotten selling over the past few years.
Speaker 2: When the gold.
Speaker 1: Price has risen so much.
Speaker 4: If Eric Sprought went into the silver market tomorrow and
bought up two hundred and fifty million dollars of silver
on the COMEX, that would make a dent, and then
he could he could do he could pull a Warren
Buffett move and something like that. But he doesn't need to.
But you know, I think he's going to be as
rich as Elon Musk wrote an article about it when
the market really breaks out I.
Speaker 1: Wouldn't be surprised. I wouldn't put it past him. Yeah,
he will be as rich as Elon Musk. But that's
for another day. David, tell us where do we find you?
How do we subscribe? How do we connect with you?
Speaker 2: Yeah?
Speaker 1: My website is Junior Minor Junkie with a y dot
com and you could also find me on kit go.
Each week, I have a weekly column that's posted every Friday.
Speaker 4: All right, excellent, and I will read it every Friday.
You can subscribe it. It'll come to your mailbox. Just
go over to David's site and the link is in
the show notes to this interview. Questions for David and
myself shoot an email to me kl at Carrie Lutz
dot com. David, we'll talk to you in six weeks
or so. Let's see what's happening. Okay, buddy, looking forward
to it. Always great to see you.
Speaker 3: Thanks for listening to Carrie Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network
Speaker 1: Now more than ever