David Erfle: Technical fund for gold stocks, where to find opportunities

David Erfle: Technical fund for gold stocks, where to find opportunitiesYoutube

Interesting gold price action has been prompted in recent weeks by factors such as the ongoing war between Russia and Ukraine, as well as the US Federal Reserve meeting last week.

The yellow metal is still trading at high levels, but will its gains hold? David Erfle, editor and founder of Junior Miner Junky, said he saw support trying to hold at the US$1,900 or US$1,920 per ounce level.

However, he told Investing News Network, he wouldn’t be surprised to see gold test US$1,850 as it faced “heavy resistance” there before the conflict allowed it to move higher. to burst.

Erfle is broadly optimistic about the future and noted that when the Fed begins a new round of interest rate hikes, it tends to bottom out in the gold market. In this case, central bank plans were telegraphed well in advance and gold companies started to bottom about six months ago.

“Gold stocks have now technically bottomed – the VanEck Gold Miners ETF (ARCA:GDX) and VanEck Junior Gold Miners ETF (ARCA:GDXJ) have technically bottomed in six months,” he said.

When asked where he is currently focusing in terms of stocks, Erfle said he has acquired junior developers at a later stage that are at the feasibility stage, or at or near the funding stage. Many have seen massive sell-offs, but he thinks that should change with funding becoming more accessible and market participants realizing that the assets held by these companies have good margins with a higher gold price.

Erfle predicts more gold mergers and acquisitions this year and noted that unique asset developers and producers will likely continue to be taken over by larger companies. Early-stage companies are also attracting the attention of global miners.

“I also expect to see a few more mergers of equals, because let’s face it, this industry needs more consolidation. To attract generalist capital, these companies need to get bigger,” he explained.

Watch the video above to learn more about Erfle on gold and gold stocks.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, have no direct investment interests in any of the companies mentioned in this article.

Editorial Disclosure: JInvesting News Network does not guarantee the accuracy or completeness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the views of Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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