Higher gold prices have many gold stocks trading at their highest levels since the beginning of the last decade. David Erfle, a professional mining investor, talks about how to value junior gold stocks. The interview took place on August 3rd, one day before gold rocketed to a record close above $2,000 an ounce. Gold was trading at $2,025.34 or better than $52.45 or 2.66% higher in aftermarket trading Tuesday.
Erfle discusses M&A activity picking up amidst the juniors and which fundamentals he looks for in selecting junior to mid-tier mining projects.
“Majors, there going to be looking for projects close to the finance stage, or at the finance stage. That are in a good jurisdiction that the company’s already proved up a large resource, and the resource has blue sky potential, and it’s contained in a district-scale size land package.”
Macro Environment Perfect for Higher Gold Prices
Higher gold prices help both junior explorers and senior producers. With countries around the world running obscene deficits in the face of the global pandemic and global depression, investors are running to gold and bidding up its price.
On the macro side of things, Ray Dalio believes we are already in a global depression. He makes some radical comments about debt, exclaiming,
“Money and credit is just digital. There is real goods, services, those are real. But, everything else is just accounting.”
Watch Ray Dalio’s latest interview below:
Dalio predicts that coming out the other side of this,
“There will be a new world order.”
Dalio Forecasts a ‘Restructuring Phase’
Reading between the lines, Dalio provides a more stark warning, explaining it will be healthy for us to go through this restructuring phase. And that,
“It’s a reorientating type of experience. That, in many ways, makes us healthy. Even appreciating the basics of life.”
As the common man experiences a ‘reorientation’ during this volatile period, gold investors are rejoicing as the long-awaited inflation, due to a decade long spending spree by governments, finally finds its way into the precious metals sector. After staying strong for years, the U.S. dollar is finally rolling over amidst record deficit spending. A weak U.S. dollar is good news for gold stocks as the majority of high-profile names power high to new multi-year highs.
Our ultimate guide to investing in gold stocks is a must-read resource to learn from data over the last several years and our tips and insights into reading potential investment opportunities in future.