[Music] I'm Charlotte McLoud with investing news.com and here today with me is David fley editor and founder of Junior minor junkie thank you so much for being here great to have you thanks again for having me on Charlotte nice to see you again as well really good to be speaking with you and we're catching up after pdac when we had a a quite brief conversation I think this one will be able to go into a little more depth and of course where we're going to start is with gold so if we look back to that PDC time when we


were speaking that was at the beginning of March and I think we can really trace this breakout and gold back to almost that exact point in time so I wanted to take a look back at Gold over these almost two months at this point and ask you about its performance has it has it surprised you during that time well the move the severity of of of the move up upwards has really not surprised me because I've been expecting a breakout for a really long time above that 2100 level that was the that was


the the magino line of resistance right for for four years that 22100 level just gold could kept running up there and falling as soon as it got there but it created this huge base as it was doing so so whenever you have a breakout of a of a large base the breakout move can run rather fast I mean the move really started uh in in the middle of February when gold tested 2,000 for the last time and then gold went up in round numbers about $450 in two months since then so uh and in the middle of that we had that major


breakout so the move higher you know it remained overbought for a really long time that wasn't really surprising considering the Catalyst the catalysts basically for the the moo we had geopolitical and uh macroeconomic catalysts happening at the same time so that wasn't really surprising no okay okay thank you for going into that and I'm hoping we can talk a little bit more about Catalyst for gold right now I've heard a lot of different ideas about what caused that gold breakout and


I'm wondering I guess what you're watching right now what are the main factors that you're paying attention to for gold at the moment yeah well the gold price started to break out on macroecon for macroeconomic reasons and then when the Middle East Powder Keg started to explode that's when gold really started to bust a move higher and it nearly reached 2500 um so now you know after after four consecutive weeks of closing above its weekly upper Binger band The Binger band is is an algorithm designed to keep the


keep the price of something within bands 95% of the time lower and upper bands so gold closing above its weekly Binger band for four consecutive weeks there was a 99% chance technically of the gold price having a correction this week and it started right away on on Monday as Middle East tensions pretty much calmed down so so now the market is pretty much focusing on the macroeconomic again because we got the pce data inflation data coming out on Friday and that's the fed's Pervert Target right and at the


same time we've got the Federal Reserve on a blackout period before the next Federal Reserve meeting which is next Wednesday and um the towards the end of last year there were job owning rate Cuts you know up to six rate cuts by 2025 and three rate Cuts this year well now they've they've they've talked back walk that back all the way to possibly no rape so the uncertainty that's going on the the market realizing that the feds between a rock in a hard place the debt situation the geopolitical


situation all these things are factoring into the to the gold price now so I expect it to remain pretty volatile here um when we get that pce data on Friday depending on how the market uh accepts it or doesn't accept it or uh comes to the conclusion that hey it's going to be be higher for longer even longer um the the dollar which is consolidating around 105 which was former uh which was a former resistance now it's it's creating a bull flag here to possibly go to 107 now the gold price and the dollar have


been going up uh together as a safe haven because of what's happening in the Middle East so will the pce data coming in hotter than expected which most most everybody's expecting here it will keep the keep the Fed you know higher for longer you know higher interest rates is a is a is a is a big drag on this economy and the stock market is starting to crack because of that so will gold focus on that will gold Focus will will the Middle East Flur up again there's a lot of things going on here so but gold


can actually correct all the way down to 2200 even it's it's corrected down to 2300 already it can correct down to 23 at 2200 and still be in an up print so Gold's got a lot going for it right right now and um the stock market is there's a lot of uncertainty in the stock market there's a lot of uncertainty in fed policy so um I'm really not concerned about the gold price I'm more concerned about uh when the gold stocks are are are are going to finally start to react like they


historically react and and show uh a two to three times leverage in the gold price price which which they failed to do thus far thus far thus far okay and I will we're definitely going to come back to the gold stocks but just before we go there you know we're talking about the fed and these interest rate cut expectations which have been steadily reducing from where we were kind of at the end of last year as you mentioned so I'm wondering you know why have we seen that economic strength in the US why why


is that continued because I think that's kind of what's Behind These pushing out of the interest rate cost well a lot of it is short covering right you see shorts start to short the stock market ahead of of Economics of of US economic data coming out the data comes out strong and they have to cover so a lot of this is is has been short covering and a lot of it has been AI stocks continuing to go to go higher and now we're starting to see cracks in AI stocks you know Tesla's already broken


uh broken down a while ago Apple started to break down Microsoft has started to break down so people are starting to figure out hey maybe I should I should take some of these profits off the table so um but but but this but but the US economy is still the the strongest economy in the world and it is TW makes up 25% of the global economy but basically you know all all of our growth has come from debt I mean since 2008 all all US debt that's governments you know Federal governments State Municipal and


and and and and corporate debt and and household even cons and Consumer Debt it's all grown almost 95% the debt so and just the federal debt alone has gone up over 200% so um the uh the Market's starting to realize that hey this this debt will never be able to to be paid off it's going to have it it it's basically going to have to be H H have to be inflated away so but but but the US isn't really in a position like they were in 2008 when they capitalized all the banks to to try to inflate away all


the debt there's just it's it's it's becoming too much of an issue so that's what gold price is is sensing is that that uh the FED is stuck and um they're basically can't be trusted in what they say anymore because they they went back and they in late last year they they started saying that hey we're going to cut interest rates and now they're saying no we can't cut interest rates could because inflation is remaining higher for longer and the market starting to figure out that hey when the


when the FED finally does have to cut rates they're going to have to do it with Rising inflation and that's stagflation time and that's that brings that brings uh back memories of the 70s so all all these issues you know gold is sniffing out all of this and that's why I I continue to believe that gold is is still going to go a lot higher I mean based on history it's it's it's it's about to really take off after a major breakout yeah and that is one of the questions I had in mind to ask you is if


what we're seeing right now can be looked at you know historically in comparison to to another era so it sounds like yes yes absolutely I mean the gold bull market that started at the turn of the century in in 2001 um what really kicked it off was alen Greens B coming out during the for on the first trading day of 2001 calling an emergency meeting and doing a 50 basis point rate cut um you know and every time the the stock the the gold has had these major up legs it it's coincided with the stock


market going into a bare Market um and with within the you know we we s we saw the gold price from 2001 to 2005 double from 250 to 500 and then we had a consolidation period for a couple years and then we saw the gold price double again after the consolidation was over from 500 to a th000 we saw another consolidation for a few years we had the the great financial crisis in 2008 where it knocked gold back down to to to below 700 but then the gold price doubled again from a th000 to to to nearly 2,000


in a in in in a couple of years again so I I have no reason to to believe that it won't happen again here so that means that will we see see a gold price upwards of $4,000 in a couple years I I don't see why not all right and and you've mentioned I think many factors that are adding to these tumultuous times and I'm gon to I'm going to throw in one more which is where we're in an election year for the US so does that have have bearing on what's Happening yes it absolutely does


and uh you bringing that up is interesting because um in the in the US here we've had this is you know we're the world's largest Su largest superpower and we entered Uncharted Territory last last uh uh Monday when for the first time in history a former president is being tried in a court of law and this is happening during an election year and most everybody is is is concerned about this because they see it as being highly political Donald Trump is leading in several polls for for as the as to to be the GOP candidate


so if he's he's put on trial in New York now and there's and there's three other trials after this that he's got to go through he can campaign and if he's if he's actually put in jail before the election I mean this the potential for civil arrest is just unfortunately really really out there so um the gold price is sniffing out all of this as well um uh you know um if you if you take a look at at what's happened um with this with this election it's it's it's really unfortunate how you know the


two sides are becoming farther and farther and farther apart and then you know once the election is over I don't see the other half really accepting the Victor just like the just like what's happened during the last two elections but this one could be even more heated because like I said I mean the leading candidate might be in jail by the time it happens and um it's going to be really interesting how it's going to unfold but I don't think it's going to get lost on the gold price that's for


sure yeah I I think we already got a taste of that unrest at the last two elections like you said so that that would definitely be something to keep an eye on and I'm sure we will be able to get away from watching that if we wanted to so keep an eye on that going going back to gold one more question on the gold price so you mentioned 4,000 as you know I think more of a longer term level for gold in 2024 I think people are are wondering what's the potential this year so what are you seeing well it's already hit its first


uh see it broke out of a of a technical pattern the most bullish technical pattern uh in technical analysis which is a cing handle pattern and it was a 13-year cupet handle which it's broken out of and the first Target was 2500 we we pretty much reached that Target with gold hit 20 with 2450 a couple weeks ago so after after a period of consolidation $3,000 is the is the next Target it's also you know a psychological round number so I wouldn't be surprised to see a $3,000 reached at


some point this year uh but also you need to take a look at the silver price because the silver price has finally to to to a certain extent has started to play catch up here to the gold price but its major magal line resistance has been $30 an ounce for the past 4 and it can't get over $30 an ounce it tested it again recently a couple weeks ago and fell sharply back back down again so I think once you get the silver price breaking out above 30 I think that will really get the bull market going in gold and


especially in Gold stocks and we also need to see the gold silver ratio trending below 80 it's about 85 right now so even though the gold the silver price has started to take off it's still showing relative weakness to the gold price although it is starting to Trend lower but it needs to to Trend lower below 80 to1 before we really get I think some some movement in in the gold stocks in relation to the gold price because they're still massively undervalued in relation to Gold okay okay so for silver that that


$30 level is key and what do you think pushes it over the edge because it's very it's very teasing it gets very close and then it goes away well I think I think going back to what I mentioned before uh about the Federal Reserve having to being forced to lower rates because i' I've been saying for the past you know several months that I don't think the FED is going to lower rates until they're forced to and being forced to means the stock market really starting to to crack


and go lower the the S&P getting below 4900 and really starting to move lower during an election year I think there'd be a lot of political pressure for for the FED to to to lower rates to despite inflation being so high continue and and well above its two its fantasy 2% Target so I think when that happens that's when silver really takes off okay okay and so of course it all ends up being connected if yeah okay okay so I will I will let you go back to what's going on with the gold stocks so this is really important


and it's a topic that we also spoke about during that early March convers ation we talked about the disconnect and how people are of course not very happy to see the gold price at such historically high levels and their gold stocks not necessarily responding so are we seeing any signs there that this is going to change yeah we are we're seeing several signs um we're seeing both gold and and gold stocks started to outperform the stock market right as we came into Q2 and the gold and the gold


price was starting to break out above that 20200 level that needs to continue and it and it needs to accelerate um and I think it will accelerate once the stock market really starts to see more selling and people start to ro rotate those huge gains that they've had in AI stocks and and crypto also and they start to start to say hey wait a minute maybe I should put some of the some of these gains into the safety of gold um it's it's happening in China you know in China there's a huge bull market going


on in in in Gold it's much it's much stronger than it is here you know because it's being participated by by the people as well there's ETF buying there's there's physical buying there's Central Bank buying going on in China so but that's not happening in in in in the west you know central banks aren are are buying as much gold in the west and the citizens AR aren't buying uh gold via ETF they are buying at Costco which you saw you see you saw that gold that Costco is selling upwards of $200


million a month in in in Gold uh in 1 o gold bars but it hasn't really transferred into ETF buy quite yet I mean the outflows have ceased and they've started to turn the inflows but um we really need to see investment demand pick up in the West for in Gold okay and we're getting to the point where we should start to see the the q1 results from the miners so I was going to ask how how important do you think that is for for the gold stocks and interest in in Gold yes that's that's


very important as well because you know that margin compression has really hurt the gold stocks a lot you know the the gold price basically went nowhere for four years while inflation raged so um gold averaged uh it looks like from from uh what I've seen from uh production numbers that a lot of these companies have uh announced already um gold average with the average price they sold gold for q1 was about 2070 and that's that's about $100 higher than Q4 so I think uh you know the profits are going


to be much better but I think the Q2 profits are going to be even stronger we're not going to see those results obviously for another three months but uh yeah I think the the the the companies that have you know that have low all-in sustaining cost on the lower end of the curve they'll they'll they're going to they're going to report very strong uh results okay okay and and good point you know of course we'll we'll see what with the next quarter rows as well and that will


be important so I just want to also check on on your focus right now so if I'm remembering properly and I'm probably going to oversimplify this but I believe you were focused not on the Juniors but on the later stage explorers but and developers as well so is that still where you were at yes I'm I'm still not not not concentrating on on early early stage companies because uh there's a lot of these late stage developers and and growth and small cap growth oriented producers that have a lot of growth in


them I I like those uh much better because they've already found the ounces and they're less risky but the problem for a lot of them is is raising the capital you know a lot of them have to raise more three two three times more Capital than their market cap to to to start constru these projects so I'm con I'm concentrating on these companies that have multi-million ounce deposits in safe jurisdictions and the management teams have access to Capital they and they and they haven't blown out their


share structure in a bare Market while drisking their projects you know several of them they looked a lot more attractive a few years ago but unfortunately they've had to blow out their their share structures to drisk their projects in bare markets so there's not as many of them that look attractive anymore due to that as far as you know their upside is concerned what once was three to 10 times upside maybe maybe one to three times upside now because of the blown out share structures de risk project so it's very


tricky you know it's you have to be super selective on on the companies that you that that that you speculate on still we haven't had that aha moment where the sector has started to really take off uh We've we've we've seen several quality issues bifurcate from the sector and start to move higher with the gold price but um as a sector it still hasn't really broken out yet because we haven't had the interest in in in the retail Market return yet I mean they left 12 years ago and they


still haven't returned so we need to get more speculative interest we in into this sector especially into the Junior's base so until then it's still a stock Pickers Market as far as the juniors are concern great and I was going to ask in terms of the Juniors is there a point in this this bull cycle where you would say okay now I'm going to look at them or is is it really not not worth it at at this time oh yeah there'll be a point there'll be a point well where I'm going


to say okay it's it's it's it's time to start looking at the more speculative end of of of the Juniors the the more early stage the ones with that have that have tied up large land packages and they're still in the early stage of of defining a resource there will there will be a time while I'll come back into those stocks but uh that's that's not here yet okay okay we'll keep checking in with you on that one all right as as we're getting closer to the end here I wanted to check


in with you on some comments you made in one of your recent commentaries on mindset and you're talking essentially about the importance of switching your mindset from bullish or sorry bearish to bullish and and you really have to do that in order to kind of take advantage of these moves so I thought that would be really useful to go into here yeah I mean um you know it's once you had a major breakout in the gold price historically um you know you've you still got a lot of hesitancy in in the


junior space you know the miners take off first the royalties and the mining companies take off first and then it trickles down in into the Juniors so people that you know investors that have had a lot of patience in accumulating uh stocks during a bare Market they have to continue to have the patience to let their to let their research in these companies and T and taking a chance and and and accumulating them when nobody wants them to pay off because a lot of a lot of investors and I've been you know I've been a victim of


this in the past and that's how I learned uh when I first got into the sector you know the the the the the switch was flipped and all the you know most of the Juniors started taking off and I i' i' i' I'd been you know the ultimate contrarian I was I was buying fishing lines and I was accumulating these stocks when nobody wanted them but several of them hadn't taken off yet and and there was other ones that I was watching that were leaving the station and they were really starting to move


higher but uh you know I I I lost patience in some of the ones that I was down on and I took a loss on some of the ones that that that hadn't taken off yet and I chased some of the the ones on my watch list and it turned out to be a big mistake because I because I basically left a lot of money o n on the table as as well as showing some some uh some some some some losses while you know in a in a in a bull market so you know that's what I want to caution against you know I mean if you if if you're


keeping up with these with with these companies and and you know you they selling them should be company specific not sector specific meaning if the company does something that you that you feel will be bearish in the long term while the while while the sector is going up absolutely sell it and get into something else but if that's not the case don't sell it just because it hasn't moved yet um you know that's that's going to come you know once the retail finally gets back into the sector


you know after leaving 12 years ago these things are really going to start taking off I mean if you take a look at the entire uh asset Global asset base um gold and the gold mining sector is less than 1% of of the total Global assets base that's the lowest it's been in over a century so you know once these once the retail starts to come into these things they're really going to move quickly the quality ones anyway there's still a lot you know there's still a lot of uh of Lifestyle Juniors that need to


go away uh that haven't and probably won't so you have to be very wary of those that's why I say you have to be very selective in the companies that you're going to hold while this bull market really takes takes off and gets into the next stage I mean we're in the very early stages here gold these gold mining Cycles they last about three years we had we had the first major one of the century was 2001 to 2003 then we had a consolidation then we had another mining cycle from 2005 to


2007 another consolidation and then the next one was 2009 to 2011 but since then we've basically been in a depression in in the junior sector we've had a couple of six-month bull markets followed by four-year bare markets it's really you know Zapped the life out of this sector I mean people not only have forgotten the sector but a lot of them really hate it so that's you know that is that sews the seeds for a major bull market coming because you know bare markets don't last forever just like bull markets don't


last forever like I said we're seeing a lot of signs that we're coming out of it right now that sounds like a really good place to wrap it up but I will I'll put it back to you in case you had any finer thoughts or if you want to let everybody know where they could find you yeah sure um I write uh a column uh in Kitco it comes out every Friday uh you can find me there or you can find me on my website Junior minor junky with a y.com and pretty much uh my last message is if you've been accumulating stocks


and you're very frustrated you know like like my of course myself and a lot of my subscribers and a lot of people in this space um you know keep your head and make your decisions on what on buying and selling make them company specific it with a bull market in mind now you can't you can't be bare Market thinking anymore we're now in a bull market so you know you have to change your mindset or else you'll let your emotions get get the best of you okay really good thank you so much for coming on to gold for


what's going on in gold right now and a little bit of silver this is really good just my pleasure Charlotte always great to talk to you great and once again I'm Charlotte McLoud with investing news.com and this is D earthley with Junior minor junkie thank you for watching if you like this video make sure you subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below we'll see you next time [Music]