Kerry Lutz and David Erfle engaged in a detailed discussion about the recent positive trends in the gold and silver markets, highlighting significant price movements and market dynamics. Silver has notably surpassed the $32.50 resistance level, reaching $35, while gold prices have also seen substantial gains. Erfle pointed out that miners are consolidating in a bullish flag pattern, breaking through key resistance levels, which has rekindled interest from retail investors after a decade of decline.
Despite these gains, both the GDX and GDXJ indices still have considerable growth potential compared to historical highs. The conversation also touched on the upcoming Q3 earnings announcement from Newmont, with expectations of strong results due to rising gold prices, which could further attract fund managers as the stock market shows signs of weakness.
The discussion further explored the evolving landscape of the mining industry, with major companies acquiring junior mining assets to enhance their portfolios, particularly focusing on high-margin deposits. Erfle noted the relative ease of obtaining mining permits in certain countries, which could be expedited by changes in political leadership. Both speakers emphasized the importance of modern, environmentally friendly mining practices and the growing industrial demand for silver, which has been experiencing a four-year deficit.
They also cautioned potential investors about the risks associated with buying silver, including scams and the need for due diligence. The conversation concluded with a reflection on the importance of capable management in the junior mining sector, underscoring the need for vigilance and education in navigating this volatile market.
Find David here: JuniorMinerJunky
Find Kerry here: FSN and here: inflation.cafe
We're starting to see mainstream interest 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 roll over an earnest. It's starting to roll over here today and investors are going to look for something to rotate there incredibly huge AI gains into something that is undervalued and I think there's very many sectors out there more undervalued than gold stocks despite the gold price being up 34% this year and trading at all time highs over $2,700 an ounce. You're listening to Carrie Lutz's financial survival network where you get valuable information you just can't find anywhere else. To thrive in today's trying times you need the financial survival network now more than ever go to financialsurvivalnetwork.com and get your free newsletter and gift financial survival network now more than ever and welcome you are watching and listening to the financial survival network on your host Carrie Lutz well gold broke 2700 the other day silver silver was up there $35 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 Earthly junior modern junkie.com and if you got a question with David myself email kl@carrylutz.com David as always welcome back. So the markets kind of got new life in it since silver started taking off. Yeah, thanks Carrie always great to be on the program with you. Yeah, 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 3250 was really strong resistance in silver for quite a while and a couple of weeks ago the gold price had an $80 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 in a four week bullish flag from a huge move in 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 $80 correction in the gold price the miners broke down out of that flag interweek and came down to test their 50-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 the SIL and SILJ made a 52 week high it made 52 week highs that week while GDX and GDXJ did not and this was taken place while silver was still showing relative weakness to gold so that was that was a little tell that silver was about to break out because the miners were signaling that silver was a was a finally about to break that $32.50 ceiling and it certainly did the following week we had and matter of fact yesterday silver closed at $35 which was the next resistance level it went up there really quickly that's what happened with silver moves in both directions it moves really quickly so and and also we've had now we've had a breakout above that resist above that multi-year resistance see them when the when the when the miners were flagging they were flagging below multi-year resistance and 40 in the GDX and 49 in the GDXJ and they broke out simultaneously with the silver price you see when when when you've seen basically you saw that gold move but when gold broke out above 2100 ran to 2500 it did not take gold stocks and the miners with it gold stocks and the miners continued to lag I think the reason for that is that the the the the major reason for 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 the we needed basically the the miners to break out of those strong resistance level at the same time as silver was breaking out of the strong strong resistance and that's indeed what's what's happened and it's also brought in a lot of mainstream activity into into the gold price you've seen how you're seeing western investors buying gold ETFs even though China has stopped buying for the past five months you see when when the gold price got too high China stopped 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 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 well I don't see that happening I see 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 some some mainstream retail investment coming into the sector that was the big thing that was lacking in this sector was what was that the main was basically retail who left this sector about 12 years ago when gold breakdown broke down below 1500 back in 2013 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 at at at really depressed levels despite despite the gold price rising uh to to to nearly twenty eight hundred dollars now but recently we've we've seen that change uh we've seen um since the since the uh 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 um lagging juniors starting to break out of strong accumulative bases at much lower levels so the juniors still have a lot of catching up even though the the the miners still have a lot of catching up to the gold price I mean the the GDX um still has about 25 percent to get higher to go to reach its 2011 peak when gold was still well below two thousand dollars an ounce but the GDXJ has has about 65 percent more to gain since it broke down from its from its high at 137 back end in 2011 it's still it's still right around fifty four fifty five dollars here so it's got plenty of catching up to do and then if you take a look at at the smaller juniors that are that are still that are still well below the that are still basically uh trading at at well below where they should considering where the gold price is that's where the real opportunity lies remember we talked about new month 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 new month when we talked I think new month was forty one or forty two it's now fifty eight and it went even higher than that yes and uh speaking of new month uh later today after the close today here on uh October 23rd new month's gonna kick off cue three earning seasons with their financial results and they're expected to to really uh blow it out of the park because basically the gold price the gold price in q3 averaged 24 77 in house which is 140 dollar higher than where it's uh than it averaged in q2 and we had blowout quarters in q1 and q2 in new month and several and most other major uh mining companies so um I I expect that um once once new month comes out with their 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 to see uh new month beat expectations and this will like I said this will be the third quarter of my of minors uh meeting expectations so I don't see generalist fund managers um being able to ignore this sector too much longer and like I said we're starting to see mainstream interest come into the sector and a third consecutive blowout quarter um is gonna get these fund managers really interested in this sector especially if the if the stock market starts to roll over an artist it's starting to roll over here today and um you know investors are gonna look for for something to to rotate there incredibly huge AI gains into something that that is undervalued and and there's I think there's there's very many sectors out there more undervalued than gold stocks despite the gold price being up 34 percent this year and trading at all time highs over 27 hundred dollars an ounce and uh you know new month uh broke the cup with a handle pattern back um back earlier uh uh few months earlier right we were watching that uh cup with a handle and well well well yeah I mean if you but if you take a look at at the silver press now that's got an even more attractive cup and handle pattern matter of fact the the handle is is it's got its own cup and handle pattern and in in from from a from a multi year from a multi decade cup in in silver I mean I don't even know if you would consider it a cup and handle since it's since it's been that long but um it the silver price is incredibly bullish and especially when you consider the fact that the gold price is now finally reached its its its inflation adjusted high set back in 19 in January of 1980 where we had the gold price have that huge spike ending uh to the bull market in January 1980 when it got to 850 dollars an ounce well the gold price had yet to reach that level in inflation in government inflation adjusted terms until just recently but but if you take a look at silver the silver price um needs to get to a hundred and fifty dollars to reach its inflation adjusted price that the hunt brothers took it to back in 1998 yeah well eric sprouts saying uh three hundred dollar silver right yeah well you know um I don't know about these grandiose um calls about gold I saw a number today in gold of a hundred and fifty thousand dollars now you always see these crazy calls when you see the gold market really start to take off um I like to be more pragmatic and I'll be very happy to give if the gold price hits my target of three thousand dollars by by q1 of next year very likely very likely though what effect of any do you think the election is having um you know everybody talks about the election not from political standpoint of course but just just in terms of markets and is trump good for uh inflation well it's it gold's got so many tailwinds you know um you've got the debt situation you've got the geopolitical situation you've got this contentious u.s election it's drawing even closer where you know it's shaping up to where neither side is going to accept the result and and that would would create even more chaos in in the marketplace um you know you've got on 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 got uh the republican saying the camel 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 um on november 6th or 7th or whatever it's going to be that will probably be that will probably that will probably go in have to be uh decided in the supreme court so um 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 they're bought even quicker I mean we had that that $80 correction lasted within a week and it was bought right away and then went right back up over 2700 and created I think it's 39th or 40th daily all-time high um sets arch so um yeah it's it's really interesting the way it's unfolding here and it's kind of scary at the same time yeah a little bit uh it'll be interesting to see uh how they get out of this mess if they want to yeah it's a mess it's 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 um for the reasons why it's rising you're not really happy about yeah well then you've got the collapse of china taking place as well which uh you know right the stimulus there that they that they he tried to 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 50 basis points so you know lower real interest rates uh these geopolitical chaos um 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 yeah ain't that the truth uh yeah it's uh to be avoided at all uh possible cost right a gold looks just the the gold chart looks just looks just like a giant middle finger to everything that's going on right now yes it does yes it does all right so what do you think we can look forward to you said three thousand dollar gold by q1 of uh 25 yeah and you could see silver hit 40 dollars I mean it's already at 35 and we're seeing a a nice little healthy correction today because it went from 3250 to 35 dollars and have been in just a few sessions but um yeah I mean and at the same time you're seeing uh silver come down and probably test the breakout at 3250 33 you're also seeing a lot of these um gold stocks and silver stocks that are breaking out of their huge consolidation patterns from from uh multi-year resistance they're coming back to test their resistance so that's giving you know and uh speculators an opportunity to get into these stocks that have already broken out all right so the stocks are going to be active and the mna is also picking up we've seen a few major uh acquisitions take place since we last spoke yes I mean uh you know these mining assets controlled by juniors that that provide new gold sources and and leverage to to these company portfolios that need need growth they're they're becoming increasingly increasingly attractive to the to these to these majors and mid tiers because you know with with all with with with the rising cash flow that they're creating now um with you know with margins now I mean these margins are in q3 you're going to be upwards of a thousand dollars an ounce so they've already they've already concentrated on the health of their balance sheets they've got healthy balance 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 they're and they've started to do that now and mna's really started to pick up yeah and we saw with uh new mod 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 uh what they call uh lower tier assets tier two assets yeah which any uh mining company out there would give their eye teeth exactly what are they thinking here because well they're concentrating on higher margin ounces and bigger deposits with blue sky potential there 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 on to them to them to the minds that that they feel meet that tier one criteria that that produce upwards of you know 300 over 300 uh thousand ounces a year i mean i have 10 15 20 year reserves so this is this is the sweet spot and um you know there's there's not a lot of those assets around and um now that now that the gold price is really taken off um a lot of these numbers that that these analysts are are are basing these numbers on you know they're they're 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 at two at sub two thousand dollars an ounce so uh the market is starting to price in the fact that hey the 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 so yeah the market has it really caught on to the the you know the smart money's caught on to this because we've seen a lot of these jr's really take off with the gdx and gdxj the late stage jr's with these high margin that 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 shovel ready out over there they they've really taken off but there's a few of them right there's so right there's a there's projects very there's very few of those projects out there so so what's going to happen is after these these jr's have already brought up so much they're going to start you know rotating those profits into the lower tier jr's that that that's still you know that 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 they also need more permit de-risking that's the thing because it's some of these projects are still two three four years away from being shovel ready and in the lesser jurisdictions right less secure exactly exactly south of me no jurisdiction is completely a 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 ounce deposit that you're de-risking in Canada is a top-tier jurisdiction and you've got the access to capital you know 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 Vois which is a lower risk jurisdiction in a higher risk area of the world if you need a permit over there you just ask for one and they give it to you like some yeah yeah so exactly in the maybe and and and Cote de Vois absolutely they're you know and because basically they they take a chunk of them they take a chunk of the asset they take 10 you know 10 20 percent of the asset and they give you the permit as soon as you need it okay got a question for you 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 45 gets elected i'm talking about trilogy because they had the permit to build the road and the mo yeah your way gambler yeah handled the road in a big huge contention but bane of contention over there and it's hit a lot of Alaskan companies um yeah i mean you 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 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 to this isn't my vote of support for him this is just a fact of his last administration it was taking 10 years to get a highway project cleared through the department of transportation in washington and what did he do he he said if if there's no significant federal environmental action something like 50 page or 100 pages will do but if there's federal action 150 and you're getting one person who is in charge of your application throughout the lifespan of it but this speed it 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 20 so assume that he hits the ground running this could be a golden period for for mining here yes absolutely i mean it's you know it's it's no secret that um we need more metals for this you know for this for this green movement and this pipe dream we mean a pipe period exactly so you know they've got to fast-track these permitting timelines and this in canada in the u.s 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 exactly but the red tape you have to go through and the timeline you have to deal with to get these permits is too long and they're already starting to address it in bc i imagine yeah exactly imagine if uh copper projects get green-related like trilogies which is one of the best untapped oh yeah versus the waiting permit they've got everything stopped and they're just waiting for that permit and we 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 and so and then uh just imagine that they unleash lithium production which there's no real reason to do it but there there's no reason not to there's not there's no reason to inhibit any of these productions any of these minerals so-called crucial ones because the uh the state of the art of mining is not like it was a hundred years ago or even 30 years ago you know we're in a different realm so environmentally it's just the objections aren't real and imagine uh 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 absolutely yeah i mean especially in silver because silver is it is better to deficit now for four years and um you know it's just need it's it's it's required in so many things it's so it's required in so many more things now than it was 20 years ago but it's now more of an industrial metal than it is a precious metal it's required in my safe in my in my as well i've always held on you know i had to had to sell little gold over the years divorces taxes weddings for marion all that could shift and you know if that's the first time i ever cursed in the show in 14 years and just the divorce here divorces so but i never sold an ounce of silver and even added to it you know the here yeah the junk silver that i bought at less than five bucks an ounce back in 2003 2004 whatever it was i still got it all i'm not touching it and i was a big buyer after the financial collapse uh when it was seven to nine dollars an ounce and ten and i brought up until the low 20s which i never regretted but not much in the low 20s 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 now oh i don't know i don't even follow it anymore but i know that but when i bought it it was 20 something junk was trading at a discount discount to the yeah same same here yeah no you can't you can't get discount to spot it all anymore there's you premium to spot it and everything now uh you know what i bought i did it was just an exercise for community members to show that you could be done i bought war nickels maybe a couple thousand bucks worth but they're 35% silver and they were trading like a 12% discount to uh melt value when i bought them david hi right it's great yes you're collecting juniors that are trading at less than cash in the bank yeah i mean like what are they thinking here this is this isn't rational here these are these markets are not behaving rational and hopefully i'll be alive when they start the 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 in it 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 oh absolutely yeah for for over 20 years i've stood my position on this and um it's been it's been a long crazy roller coaster ride but i wouldn't do anything different um i love doing it and i love educating people on the the not only the the value of 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 volatile sector but when it moves it moves like uh 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 a the first thing you have to do with every coin you buy is weigh it all right if it's off by a bit 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 foolproof you can yeah tungsten weighs the same amount right right because i've and i've heard of a silver coming out of fakes rounds coming out of china like northwest territorial which was a strategy operation but they weighed exactly the same but the measurements are off you're not in a position 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 so you have to be vigilant for this and it's the generalist investor finally you know starts to come into the 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 and you can't oh 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 bullion dealer and don't get screwed on this because like i know if i buy from Andy shekman i never have to worry but i still check and and i buy weigh it you know i definitely weigh it if the weight's off then you got to go further if the weight's spot on generally you're going to be good 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 14 years you for longer david is true yeah it's it's it's really starting to happen um and uh it's it's you know in this sector is so freaking tiny it doesn't take a lot of generalist interest to really start it moving and then buying begets buying just like selling has begun selling over the past few years even though gold price has risen so much if eric sprot went into the uh silver market tomorrow and bought up uh two hundred fifty million dollars of uh silver on the comax uh that would make it damped and then he could he could do he could pull a war and buffet move and yes something like that but he doesn't need to but uh you know i think he's gonna be as rich as elod musk grown an article about it when uh the market really breaks out that wouldn't be surprised i wouldn't put a past um yeah he will be as rich as elod 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 uh yeah my website is junior minor junkie with a y dot com and you could also find me on kitco each week i have a a weekly column it's posted every friday all right excellent and i will read it every friday you can subscribe it'll come to your mailbox just go over to david's site and the link is in the show notes this interview questions for david and myself shoot an email to me kl at karaelutz.com david will 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 thanks for listening to karaelutz's financial survival network your solution to today's trying times for the latest go to financialsurvivalnetwork.com financial survival network now more than ever
