Weekly Hot Take - The doubt
23/01 - 27/01
Welcome to another weekly hot take! This week we’ll be covering the charts of the precious metals while also expanding a little bit on how the sentiment is for current state of the metals. We will also try to explain which drill grades are good and which aren’t. I wish you all lots of reading fun and if you like the content please, like, share, comment & subcribe!
Precious Metals
$XAUUSD
(Monthly)
There aren’t much changes on the monthly timeframe compared to last weekly update. The trend looks incredibly strong from a monthly perspective. We’ve also closed past week above the big level $1923. The bigger picture here is that we’ve likely started the bigger wave 3 for metals. This wave stands for the biggest and most violent upwave there is. For those that don’t know what a wave is, i’m referring to elliot waves. On which I’ll be releasing an article in the next couple of weeks.
The sentiment behind this wave is always the following: People are still not believing the uptrend in the early phase of the wave. So they are calling for corrections and pullbacks all the way during the first part of the wave. Then there might be a scary wave 2 pullback within a larger wave 3 up. This is where the bears will be cheering and saying : “see, I told you it was going to pullback!”. But then the trend resumes aggresively and this is where the FOMO unlocks!! Then suddenly even the biggest bears and sideline money have to position quickly before prices are much higher. This leads to an even more aggressive price explosion. Slowly but surely everyone is getting very bullish and then the bigger crowd joins for the final blow-off of the wave 3. That is the phase where every average stock investor suddenly will be a metals expert and everyone will suddenly have bought the bottom of the wave 3. Also you’ll hear predictions for $50 silver again and all that crap. That is when the uptrend will most likely stop for a while. I think the plan for now remains the same. We’re positioned long juniors and physical metals, and we’re staying long untill the trend is invalidated on the bigger timeframes. That’s how we won’t be shaken out.
(Weekly)
On the weekly timeframe we can see that we had another green close against expectations, because $1923 is a very big level. This only leads me to think that the wave 3 is being confirmed and accepted by those that were laughing with it at first. We’ve now climbed around 20% since the lows. Pretty significant for such a short timeframe. When we analyse the weekly RSI we can also see that we’ve reached the upper part of the range. This means 2 things. First a small shakeout before continuation is possible. Secondly it also means that if you compare to the 2020 run and before that we’re still not as stretched, thus, have more room to rise. I continue to repeat myself on the strategy. But when we bought in the summer, we quickly were able to put stops on most of the positions and now we’re riding the big wave with all its volatility. I will continue to hold the longs as long as the price is supported by the EMA 9 and EMA 20.
(Daily)
Same story on the daily. Sit tight ;-)
$XAGUSD
(Monthly)
For silver, i’ll keep it relatively short as it’s basically the same story as for gold here. Silver tends to have these massive moves every few years. Are we going to have one right now ? We can’t be 100% sure. What we can do is having a plan. I’ll repeat the plan again. We’ve bought juniors & phyiscal metal this summer and are going to continue to hold as long as the price is supported by the EMA9 and EMA20 on the bigger timeframes. This will prepare us the best for the scenario that we have a crazy 70’s move or ‘10/’11 move.
I also want to highlight that there are 38 DAYS left to get the 20% discounted price. If you get your subscription via the button underneath you will lock in a 20% discount FOREVER. Thanks to the people that already locked this deal in! These weekly updates will slowly be going paid. If you want to stay on top of the trend via a clear and simple to understand newsletter and don’t want to get shaken out, Feel free to subscribe.
(Weekly)
For the weekly chart we can see that we’re still hanging in there, sideways consolidation before next move. There is some kind of pullback due, but since we don’t know when this pullback will come I re-iterate the plan again. We sit tight and we buy the dips (IF they come to us). For me, I prepare myself mentally for a shakeout to the yellow EMA —> that is the EMA20 on the weekly. But I’m not trading it short or closing junior positions. Imo the window to position in quality juniors is closing. I really encourage everyone to position if you have cash reserves during the (potential) dip.
(Daily)
On the daily timeframe we can see the energy being coiled in the sideways consolidation, that has been going on for weeks now. My gut feeling + monthly charts are guiding me to think that we’ll explode up. But I’ve mentally prepared for a pullback to the weekly EMA20 (as highlighted in the weekly section). Let’s see what silver decides. No need to make crazy predictions here.
As a paid subscriber will also be able to ask me special requests for the newsletter. I’m doing it for free this week to show the value that you will get. This weekend one of the followers asked me if I could elaborate on how to analyse drill holes. Underneath I’ll explain some metrics you can use and where I learned it.
Mining news and grades
So everyone always wonders, definitely the people that are fairly new to the sector or those that have no experience in geology, what are good drill holes ?
Analyzing gold drill holes involves evaluating the quality and quantity of gold present in the drilled samples. This can be done by determining the grade of the samples, which is typically measured in grams per tonne (g/t), and the width of the samples.
How do they do this ? I’ve summarized the steps below of how the sampling and grading goes :
Collect samples: The first step is to collect samples from the drill holes. This can be done by taking core samples or by using a probe to collect samples from the walls of the drill hole.
Prepare samples: The samples need to be prepared for analysis. This involves crushing the samples to a fine powder and then assaying them to determine the gold content.
Determine gold grade: The gold content of the samples is then determined by measuring the amount of gold present in the sample in grams per tonne (g/t).
Evaluate results: The results of the analysis can be evaluated to determine the quality and quantity of gold present in the drill holes.
Map and plot the results: Plot the gold grade along with the geology of the drill hole. This will help in the understanding of the distribution of gold within the drill hole, and can be used to identify any specific zones of mineralization.
Next up there are some quick calculations you can do, here my source is a video of don durret on grades. He multiplies the grades (GPT, grams per tonne) with the width, so when we multiply GPT x width:
A good hole is >50
Really good holes are >100 to 200
Excellent drill hole >200 to 500
Stellar hole > 500
This is important that as the amout of good or excellent or stellar holes is a good proxy of a potential mine. These were the numbers for GOLD.
For silver you can do the same but then add a 0 to each of the holes.
A good hole is >500
Really good holes are >1000 to 2000
Excellent drill hole >2000 to 5000
Stellar hole > 5000
For a more in-depth and complete analysis I’ll link the video of don below:
Thank you for your attention!
I hope this weeks update has been clear and provided value for everyone! Next week we’ll be giving another weekly update on the precious metals + another request of the paid members. If you liked the content, feel free to like, comment & subscribe!
Thanks and see you all next week sunday!