The metals remain in a trading range as do the mining stocks likely due to the both the upcoming election and the announcement of the next stimulus bill, which is coming closer to both parties agreeing on. I don’t think we will get one before the Nov 3rd.
This was another week full of production results from gold and silver producers. This is far and away the most companies I’ve ever seen reporting quarterly production numbers instead of waiting until earnings. Again, this is likely because investors who know production numbers ahead of earnings could lead to buying earlier, pushing up stock prices.
Endeavour Silver (NYSE: EXK; TSX: EDR) is a mid-tier, primary silver producer that operates three underground, silver-gold mines in Mexico. It is nearing a turnaround with significant production growth ahead.
All bull markets naturally flow then ebb, taking two steps forward before retreating one step back. Their price action gradually meanders around uptrends. This normal upleg-correction pattern keeps sentiment balanced, extending bull markets’ longevity. And it is a huge boon for traders, greatly expanding bulls’ potential gains. Look to aggressively buy silver and its miners’ stocks as this silver correction runs its course.
This Week in Review: Metals prices continue to consolidate but should the price of gold drop below the 50day MA, there is a chance we see a larger correction, potentially testing $1,825-$1,850/oz. Regardless of whether this comes to fruition, it doesn’t change a thing except for providing another (and likely last) buying opportunity. The window is closing quickly to get into the mining stocks at these cheap valuations. Further, any correction in gold and gold stocks will be short-lived so it is…
With another week of consolidation in the books, it is looking increasingly likely we will see a break soon. Whether this is to the upside or downside remains to be seen. If it is to the downside, it will be short-lived and could present the last opportunity before the train really leaves the station. Beyond the very-short term, precious metal prices are headed higher, much higher.
The silver miners were quick to restart operations once the lockdowns passed, and are ramping outputs back to full-speed. That should lower costs, which along with much-higher silver prices should greatly amplify profits going forward. So big additional silver-stock gains are fully justified fundamentally. This sector just has to work off its overboughtness first, through a healthy sentiment-rebalancing correction.
The volatility continued in the metals again this week, something that we shouldn’t expect to change anytime soon. There wasn’t much news-flow this week, following earnings season. There are talks about the next stimulus package that could be announced at any time, though it will be just be stop-gap until the two sides can come to an agreement on what will inevitably be a larger stimulus package. This is where the upcoming US elections come into play (note: I'm not political).