GOLD & SILVER: Generational Breakout Explained I David Morgan
Summary
Precious Metals Rally: Gold has reached an all-time high, and silver is trading over $40 an ounce, indicating a significant breakout in the precious metals market.
Market Dynamics: The rally in silver is attributed to increased buying pressure, large short positions, and algorithm-driven trading, with momentum favoring further price increases.
Institutional Influence: Institutional buying, particularly for industrial purposes, is driving the demand for silver, with countries like Russia and China increasing their allocations to precious metals.
Psychological Price Levels: Breaking through the $40 level for silver is psychologically significant, and sustained closes above this level could indicate a continued upward trend.
Mining Sector Performance: Miners are showing strong performance, with some juniors experiencing double-digit gains, and the sector is expected to continue outperforming as the bull trend strengthens.
Investment Strategy: Investors are advised to consider the mining equities for leveraged exposure to the precious metals market, with a focus on blue-chip stocks and a balanced risk-reward profile.
Potential Risks: A potential bear case could arise from a deflationary environment or a liquidity crisis, which could cool off the precious metals markets.
Platinum Market: Platinum is gaining attention as a valuable investment, especially with its use in the hydrogen economy, and offers diversification for those already invested in gold and silver.
Transcript
Gold just hit an all-time high this morning. Silver is catching up as well. We're trading over $40 an ounce and the gold silver ratio is decreasing. What does it mean? What triggered this price rally and the breakout breakout in the precious metals? I've invited the only guest I could have invited could have invited for this topic, David Morgan. He's the silver guru and of course the publisher and editor of the Morgan report and I couldn't imagine a better guest to discuss the silver breakout. and we'll we'll ask him what triggered it, why why is it so violent? What is going on? What should we be paying attention to? And what could potentially derail uh the silver train right now? Lot lots to discuss. And before I switch over to my guest, hit that like and subscribe button. It means a lot to us. We appreciate any type of feedback. Put it down below in the comments. We read all of it and we much much appreciate it. Thank you so much for doing that. Now, without much further ado, David, it is great to have you back on the show. Very timely to have you on. I hope you had a great summer. Well, Kai, thank you for the kind, flattering introduction. I hope I can live up to those words, but really, I mean, it boils down to very simply, you know, why are we moving? And it's, as I've said before, and it sounds trit, but it is true. And that is there's more buying pressure than selling pressure. And there's been a rather large short position in the silver market, as there usually is, but we all know that the market is set as a derivative. The price in the futures market which dictates the spot price and what coin dealers sell their metal for and etc is determined primarily by algorithms and so at certain levels certain things happen and I have to defer to Michael Oliver and Michael does momentum and momentum is very important being an engineer momentum is defined as mass times velocity. So like the whole idea of changing trend with a ship in the ocean. If you have a huge ocean liner, uh that's a lot of mass. So it's hard to change the direction of it. And the way you do that is uh slowly. Uh that's how these major trends can change at times. The point being is that the momentum is in our favor. The algorithms are saying buy and the institutions are buying it mostly for industrial purposes. Yet we do see entities such as Russia that's allocating uh silver and you're also seeing on the gold side where China says that their uh insurance industry can allocate up to 1% in gold. So there's a lot more momentum in a lot of ways in these both these markets and silver being a smaller market gets a larger move than gold once the momentum starts. >> No absolutely like lots of interesting things to follow up on. I wasn't aware for example of the China insurance industry being able to allocate to gold now. Um but maybe before we get to that like some of the details here and that that are sort of fueling uh the the price rally right now. But we got to talk about it. It feels like there was a trigger um in in the market just last week uh that set off the rally here and that brought back the excitement and it just cannot be just everybody returning back to work uh today as we record this September 2nd and everybody's excited. There must have been a trigger. David, did you see anything that could have caused that? >> You know, well, I'll have to be honest and say no, but I will qualify it. First of all, a lot of people think that the news, you know, dictates markets. But if you look at socioeconomics, a book that uh Robert Prector wrote, who's an Elliot wave guy, and some others, studies have been done independently, several, and really people have the idea that news drives markets. At times it does, but it's really like 20 25% of the time. So if you look for a news item like you know a breakdown in negotiations or whatever and that's what drove the market again it's buying pressure. Why? We really don't know. My guess would be the idea that the markets were closed in the United States. So that the aftermarket or the smaller markets in uh China in Asia primarily uh a little bit of buying pressure goes a long ways because there's no counterveailing forces going on at the same time. Even though markets open in different time zones, the New Yorkers or people in Chicago or wherever can trade in the GlobeEx, so they can be any market at any time if they choose to do so. So I think that really was probably part of it. That's how I would think about it. But am I right or wrong? I think really in the long term doesn't mean a lot. What it does mean is that it doesn't take much buying pressure to move this market. I think it was up over a dollar yesterday >> on September 1st. And the last thing I have to say with tongue and cheek, but this adage goes on for miles and I put it in almost every report in my May April issue that there's an adage that says sell in May and come back after Labor Day. And believe it or not, that adage holds true very often. And in the April edition of the Morgan Report, I said gold has topped at 3500 and will remain so throughout the summer and uh maybe even longer. And so here we are Labor Day and it just shoots up. So I'm going to do an update for my my premiums members today later after we're done uh talking about here it is. We have proof. It's backing off in the US markets right now somewhat, but it's holding uh a lot of the gains that it experienced yesterday. >> Miners are telling a very different story though. They were uh buy in May and maybe sell now because they've been rallying and we'll we'll get to the miners in a second, but I just wanted to throw that in. uh because they've been performing really well. Physical gold not so much in particular, silver, it's done okay, but uh the breakout is just happening. Um before we get to the miners and other little topics here, $40. Um how important was that price level to break through? Uh a lot of people have been mentioning, oh, we need to get past $40 so we can rally. I heard the same thing about $30, $34. Um how important was the $40 level, David? >> Round numbers in commodities in general are very important. there's a psychology that goes with it. And so whether we're talking soybean, oil, wheat, silver, or whatever, those big numbers are meaningful psychologically. Oh, we got $30 silver now 40 and eventually 50 and maybe 607. Who knows? But it's a big deal. And all we need to see really is uh three or four closes on close of $40 or better in a row uh on this kind of volume. We have a pretty good assurance that the trend is going to continue and that we're going higher. There's not much resistance. There's only I think I read somebody yesterday, one of uh my colleagues u in the you know precious metal space talked about I think it was only about two and a half three months where we've been above 40 on a consistent basis. So we don't have much over much resistance at all. Very few people that bought at that level are really holding now. I'm sure there's some out there, but from a technical perspective and a psychological perspective going hand in hand, you're seeing uh I think a jump probably to I expect conservatively at least 10% more by the end of the year, which would put us at 44 and perhaps 20% more, which put us at 48. Time will tell, you know, maybe this is going to sell off really quickly and we only get, you know, two couple days above 40. I doubt it. I think the momentum is in our favor. It's a I'm laughing. It's after Labor Day. Historically, we see strength into the final quarter of the year. We're not there yet, but we're getting there. So, I just And the miners, and I want to talk about that quite a bit, but the miners are something that really are assurance that we're in a true bull trend. I want confirmation. I want only not only the miners to do well, I want them to do better than the metals. I want to see that two or 3x eventually where they outperform by a factor of you know 3x for example. So if gold moves up 10% top tier miners are moving up 30%. Or if we you know that type of thing and we are starting to see a lot of strength in the miners as you express. >> Yeah lot lots of strength. I'm just looking at my screen today and uh doubledigit uh percentage gains in some of the uh juniors. actually the miners are a bit more muted today in contrast to what I've seen the last weeks actually ever since like mid July and the Q2 earnings um that uh that have really accelerated I think the the momentum here in the minor and maybe we'll we'll stay on that topic for a second I want to you know jumping around too much I'm trying to connect it um but on the minor side like what triggered that rally that outperformance as well I've mentioned before the Q2 earnings felt like an extra fuel to the higher um especially on the the bigger miners. Is that something that you're watching that is starting to trickle down now? >> It is. It's you know I've been in this market more than 40 years and I'm still learning and one historically the miners will usually lead the metal and I say usually because and that's a tip off for somebody that's you know studied these markets. Aha these gold stocks are moving but nothing's happening in gold. We're probably going to see a rally here. Well, that did not take place this time. Opposite occurred. We saw the metals, especially gold take off and the miners were lagging. And I think it has to do with a lot of things, but one of them is that the market is much more sophisticated, a lot more computer trading, a lot of algorithms out there that that do the trading. And the other thing is the value investors still look at one thing or one thing primarily, and that's earnings. Now, the earnings in the gold stocks have been phenomenal, but it hasn't equated into the price of those companies because many of these companies are trading as if gold is at 2,000 the ounce when it's been at, you know, roughly 33 to 3,400 for four months in a row. Row consolidating. And that information is now going where? into the algorithm, into a trading desk, into a hedge fund manager, into the general public, into a whatever pension fund, and whatever it goes, that knowledge is saying, "Hey, I'm a value investor. This is a real value play. This stock has got to eventually kept catch up to the earnings that it is providing that we know we have." And so that is what I think fueled the rally in the gold mining industry. silver lagging but silver actually is a smaller market as we know there are very few pure silver plays if any there's really one silver stock I can think of that's more or less pure silver play the rest are silver plays but they have you know lead or zinc or copper or gold or something combination thereof they're still silver stocks but they get a bigger margin than gold for example at the top of the market Previously uh we saw a PE of a a top tier gold company sell at like 30 PE but a equivalent silver company would sell at a 50p. Well, why? Well, silver is more volatile and I guess it's more loved at the top of a market than gold is. >> I'm not finding it in the coms table. I was curious where we're at um in in terms of valuations um for for the major miners but also some of the smaller producers like where where do you think we're at right now? Do you have an overview? >> I don't I know we're below that I think in some instances. I do want to make a caveat here because a PE is not a very good metric for a mining company. I mean there's a couple big books back there that are hard slogs and valuing a a mining company is much more about free cash flow than it is a PE. PE is useful at the top of the market to get an exit strategy. Can be used, but it really isn't like a retail store selling, you know, women's uh clothing or uh you know, grocery store, what have you. It's not a good metric for a mining company, but people use it. It's nothing against it, but it really isn't the best metric. So I just want to get that into the record because you know that's what we do primarily at the Morgan report is analyze mining companies not just gold and silver but you know lithium cobalt the rare earth elements uh the battery metals you name it copper I'm becoming much more bullish on copper than I was let's say six months ago. Uh so there's a lot happening in the resource sector and one of the best leveraged plays you can do with lower risk not no risk is in the mining equities and you start with blue chips and work your way down into a speculative section where you basically make the correct uh bets meaning how much money you allocate to each tier you can do quite well and have a balanced risk-to-reward profile. Yeah, our audience is probably getting tired of me saying it, David, but I've been harping the pneumont horn uh lately because I'm not I'm not a big fan of the company itself, but it's the second best performing stock in the S&P 500 and nobody's talking about it. >> Yeah, >> right. It's only being bested by Palanteer and uh let me just look at the updated one here. So, Newmont is up 104.5% year to date. Uh Palanteer 106.6. We're c we're closing the gap. Last week, there was a 14% gap between Palanteer and Pneumont. Give it two days, New Pneumont will be the best performing stock in the S&P 500, and nobody's talking about it. It's mind-blowing. So, I'm not worried that we're in any type of euphoria phase. Like, would you agree with that? >> Yeah. And I have to digress, if you allow me. I mean, in 1979, Heckler Mining, which is right over there, I could drive to an hour. their office and and the lucky Friday mine was the best performing stock on the entire NYSE. It went from $5 to $50 in one year. And so I put Heckla Mining in the Morgan report in the early early days, like year two or three of uh publication. And that stock was at about 50 cents and it was in danger of being delisted because there's certain rules for NYC stock they have to abide by. That stock went from 50 cents to $5. A 10 bagger. The same exact metric it did in 1979 when it was published all over the financial press as being the best performing stock. I gave that lecture in Calgary at an oil meeting, oil and precious metals, and said, "Here we are, a 10 bagger. My readers know about it. I'm asking them to cash out at this level." And nobody even knew the word heckle. So, it goes back to what you said. No one was paying attention. And that I think is a very good clearing indicator for everybody listening to this that the bull market is far from over in my opinion because again who's paying attention? Not very many. >> No, like that's the question maybe David as well to follow up on like where is the money now coming from? Is it just us mining investors and speculators that are sending the same $20 bill around or are is there actually new money coming in that is helping us reach these levels? >> It's both primarily. Well, first of all, let's talk about the metals and the miners. So, on the metals, it's almost all institutional buying on both sides, gold and silver. As far as the equities are concerned, it's a few sophisticated buyers like some of the best known names in the hedge fund industry are nibbling at the miners, the top tiers like the Numonts, but it's mostly retail coming back into the market and you know higher price, you know, cure for low prices is low prices. Yeah, it's so true though. And now they're making a move and again no one's really paying attention yet and we've yet to see anything close to the top of the market which means there's that panic manic buying and that in my view is probably a couple of years away but we will start to see more and more interest in these both from the retail and institutional side. >> That's the question like where where is the money coming from? meaning like institutionals they they have to chase returns sadly like and I've mentioned that on the show before. Uh we closed the gap or we closed the dip of the liberation day or people call it the Trump slump um back in April. Um I I was being a bit nasty hoping that we would stay at 4,800 for the year at least on the S&P 500 because I was thinking my mentality was like well it might it might make the 401k money move right into different sectors chase returns which they could potentially get in the mining space like very naively thinking very uh egocentric of course because a lot of my portfolio is in the mining space but uh are we seeing that yet like I don't think yeah people >> there's a I I should have bookmarked them because I love to give credit to other people because you know you should I remember there's a couple guys out of the United Kingdom and they do analytical work on uh strategy and and rotation and the rotation has started into the commodity sector through the equity side meaning your ADMs for food for an example or the mining for you know the commodity sector in minerals And it's a subtle but measurable shift that is taking place. So you know like going back to the ship turning momentum changing. Uh it's very subtle at first. You don't really notice that the you know this big ship with all that mass and the trend is so big and it's got so much momentum. It's very hard to move and change direction. But it is starting to change direction. And that's provable at least by the metrics that these two gentlemen use. And I see it uh by the amount of interest in our work and the kind of calls that we're getting where we're seeing people that were let's say um bigger investors that have probably participated in this massive bull trend in the S&P 500 for for a long long time looking to diversify looking to maybe hedge looking for what the next sector will be and I I see it I feel it and it is measurable. Yeah. How much is left on the table here, David, when you look at performance? Like I don't want you give like investment advice. Hey, we're we're, you know, 200% from the top, you know. Um, but I'm trying to understand like how much room is there left for the miners to run. Um, what is your prediction before we get to talking more about some of the granular details that you mentioned in your intro? Well, uh, from my work and others, it looks to me as if we're in the final leg up in a in a major bull market. And, um, I went and, as you know, we talked about it before we started recording. And I wanted to verify, you know, my work with, uh, with, uh, Elliot wave. And I did. So it said uh you know I had it correct that wave three up there's five waves in Elliot is usually the strongest and most dynamic move in the sequence. It's where the leg prices cover the largest distance and the shortest amount of time compared to the other waves. It's often has the heaviest trading volume. It tends to be the longest and most powerful wave though not always. is driven by a big shift in market psychology which we just discussed disbelief from earlier stages followed by recognition and enthusiasm as more participants jump in. So, since I think we're in the beginning of that leg, we're seeing more and more participants jump in, but we still have a fair ways to go, meaning that retail that's given up on silver, maybe not silver stocks, but very few retail investors that bought even in the 30s are buying in at 40. It's like, you know, I've broken even or I'm slightly ahead. Let's see how far it goes. But institutions need it or industrial users need it. And so that's fueling the market. I think the Asian markets are more involved than they were in the past. Although silver is not nearly as bought on a retail level in the Asian markets as gold is. Regardless, we're seeing that momentum change. And I do think that um we're going to see, as it says, probably the most dynamic move in price appreciation uh in this last leg up. And again, where does it go? I'll say probably a couple more years. And just to be uh sincere, I have said, you know, we got a couple years left more than once and probably as long as five years ago, and I was wrong. But, you know, whenever you stick your neck out, you know, it can be chopped off. But the the facts are back me up now. There was a false start, I believe, in 2016. Uh I can, you know, talk about that. I don't want to, but there were times when it looked like we're going to break into the next leg up and it really didn't carry through. This time it's obvious gold is well above the 2,000 breakout level. It's a thou 134 $1,500 above that, you know, almost not quite a double, but from 2,000 to 3500 is quite a move. And it sustained it and we're breaking out of that consolidation. Wait to remains to be determined if it's a breakout or fake out. We have a couple more days to watch, but no, it's exciting times. >> What could derail the train right now? The silver and the gold train. David, like I'm trying to come up with bare cases, and I've mentioned in other interviews, I'm I'm having a very hard time. Maybe the jobs report in the US is way more positive than everybody believes. Although nobody believes in the jobs numbers anymore, but uh let's uh what is a bear case here? >> Well, the bear case is given by uh Avi Lo. You can look him up. Uh he is a really good Elliot guy. It sounds like I'm a big Elliot wave guy. I'm not. I've studied at a very cursory level. This man has dedicated most of his life to studying Elliot and he's very good at it. But he gave a lecture at the New Orleans conference, the 50th year anniversary of the New Orleans gold show, which is one of the most wellrecoognized and strongest and best gold shows in the world. and he spoke right after the opener, Brian London, uh, about where gold is going. He said it's going to 3500 and that's it. And he sees a multipleyear bare market after that and he sees a strong case for the dollar going up. So, he's definitely a contrarian and he doesn't go into the fundamentals, but after listening to him, I came home and really thought about it because I like to look at both sides as well. And I thought what fundamentally would cause that? And the fundamental case is if we get into a a liquidity crisis where people just can't afford groceries, can't afford grow uh you have to choose between the electric bill and the grocery bill. And we're seeing that. And so what you do is you start to see money become more valuable to the average person or harder to get. And so they start to sell off whatever they have. Not that the average American has gold or silver. They do not. The point being is that if we start to go into a deflationary push, we could see uh these markets cool off. That would be the main fundamental reason that you could see it. And I need to explain that a little more, Kai. just allow me because I wrote about it in the Morgan report a few months back and I explained to people that if the S&P got cut in half for example then that ounce of gold would buy twice as much stock twice as many businesses as it does now without the price of gold changing whatsoever. So the way you need to look at it is not what the paper price of gold is, but what is the value? Meaning how many barrels of oil, how many used cars, how many houses, how many how much stock does this buy? So, I said, for example, if we saw a 5,000 uh factor on the major index and a $5,000 gold price, which isn't that far from 3500, that would be a one:1 ratio using that ratio. And is that unreasonable if we have a big liquidation where a lot of people that have their 401ks or whatever stock market starts to come down rapidly. They don't get out in time. They've seen a great deal of their wealth evaporate. So that is a deflationary situation that could I'm not saying would but could take place. So that's the fundamental case that I wrote about. Not saying it will happen, but as one of my favorite quotes, you've heard me say it before, chance favors the prepared mind. So if I were to see the market tell me, not my thoughts, not obvious thoughts, actually manifest in the market where I saw this taking place, obviously I'd put out an alert to my people and say buy puts, liquidate part, take some profits. I'm not in favor of like shooting the moon and saying, "Hey, I called the top or I believe this is the top." Um, unless I'm certain, which is almost impossible. But if the market's telling me things have changed, that ship is, you know, going the other direction or whatever, or a thunderstorm hit it as a metaphor, you've got to take action. The worst thing that beginner investors do is a round trip. you know, they buy a stock at 10, they watch it go to 80, then they fold it all the way back down to 10. Never do that. You want to protect your profits, and that's one of my main functions for my membership is to make sure we protect profits. >> No, absolutely. Uh although the message should be buy the dip, David, always buy the dip. It's always a dip. No, I'm I'm I'm joking, of course. >> Always buy the dip in a bull market. It's just, you know, but you averaging down will wipe you out better than anything else. I mean, you know, it's not a good strategy in most cases. >> True, true. Let's let's shift to momentum here real quick. Platinum metals or platinum. I know I've seen you post about it on X just the last 24 hours quite extensively, David. Um, very different topic. What What are your thoughts on platinum? >> Well, we were early on platinum and we were writing about the Morgan Report again and again and again. And I said in the April letter, gold's topped out at 3500 at least through the summer. And if you have new funds or you want to add to your positions, buy silver or platinum. And that was president call. I mean, it was like almost not to the day, but it was very close. And so, anyone that bought at that time was up, you know, 30, 40, 50% perhaps. There aren't too many platinum miners. I reviewed a few uh on a verbal update. I do these videos for for members and uh but I like it. Uh how much further it has to go remains to be determined. I think it's going to consolidate here for a while, but it's something that you should buy if you've already got gold and silver. I mean, platinum is not nearly as liquid and it's a super small market, but you pay a price in the physical market on the buy and the sell. You pay a huge premium on the way in and you have to take a discount on the way out. So, you got to know that and be prepared for that. But it is very much a unique metal and it's being uh it's being used more in the quote unquote hydrogen economy which most people don't even know about but primarily in Asia there's been a push not a huge one I don't make a big case about it but people are seeing the discrepancy between platinum being at one time when it was $1,000 and gold 3500 of a you know 3 to1 ratio I mean it's oneird third the price of gold and yet it usually sells at a premium to gold because depending on the stats it's about 15 times rarer than gold that uh why not buy platinum jewelry gold is you know going to cost me this much I can get this platinum necklace that's three times the size for the same money or what have you so there is a push into platinum but not a big one but again with a small market it doesn't take much new buying to force the price higher >> and everybody's got gold already it seems like. So let's diversify a little bit. No. Awesome. David, it was great to catch up with you. It was great to have you back on uh on the show. Obvious question and not sure if our audience doesn't already know where to find you, but just in case, where can we send them? >> Just go to the morganreport.com and all our connections are at the top right of the website. icon for our Twitter feed, I icon for our YouTube channel, icon for our LinkedIn presence, and then uh if you want to see the uh trailer for the documentary, it's at silver sunrise.tv. >> Fantastic, David. Thank you so much for joining us. It's always great to catch up, and we'll have to check in maybe later this year, give a bit of a forecast. What do you expect for 2026, of course. So, we we'll check in with you again. And uh everybody else, thanks so much for tuning in to Soar financially. Silver's broken out. Gold is breaking out at all-time highs. Pneumont is about to reach the top spot in the S&P 500 as we speak. So, lots going on and lots of good news from the precious metals front, but as David said, hedge your bets, look at other opportunities, maybe diversify. Lots of good opportunities out there. The miners are just starting to run and it's still early days, third leg, as he said, in an Elliot wave. Uh really curious what you think as well. How are you positioned? Let us know down below and uh good luck out there. Have fun and uh be safe. Take care. [Music]
GOLD & SILVER: Generational Breakout Explained I David Morgan
Summary
Transcript
Gold just hit an all-time high this morning. Silver is catching up as well. We're trading over $40 an ounce and the gold silver ratio is decreasing. What does it mean? What triggered this price rally and the breakout breakout in the precious metals? I've invited the only guest I could have invited could have invited for this topic, David Morgan. He's the silver guru and of course the publisher and editor of the Morgan report and I couldn't imagine a better guest to discuss the silver breakout. and we'll we'll ask him what triggered it, why why is it so violent? What is going on? What should we be paying attention to? And what could potentially derail uh the silver train right now? Lot lots to discuss. And before I switch over to my guest, hit that like and subscribe button. It means a lot to us. We appreciate any type of feedback. Put it down below in the comments. We read all of it and we much much appreciate it. Thank you so much for doing that. Now, without much further ado, David, it is great to have you back on the show. Very timely to have you on. I hope you had a great summer. Well, Kai, thank you for the kind, flattering introduction. I hope I can live up to those words, but really, I mean, it boils down to very simply, you know, why are we moving? And it's, as I've said before, and it sounds trit, but it is true. And that is there's more buying pressure than selling pressure. And there's been a rather large short position in the silver market, as there usually is, but we all know that the market is set as a derivative. The price in the futures market which dictates the spot price and what coin dealers sell their metal for and etc is determined primarily by algorithms and so at certain levels certain things happen and I have to defer to Michael Oliver and Michael does momentum and momentum is very important being an engineer momentum is defined as mass times velocity. So like the whole idea of changing trend with a ship in the ocean. If you have a huge ocean liner, uh that's a lot of mass. So it's hard to change the direction of it. And the way you do that is uh slowly. Uh that's how these major trends can change at times. The point being is that the momentum is in our favor. The algorithms are saying buy and the institutions are buying it mostly for industrial purposes. Yet we do see entities such as Russia that's allocating uh silver and you're also seeing on the gold side where China says that their uh insurance industry can allocate up to 1% in gold. So there's a lot more momentum in a lot of ways in these both these markets and silver being a smaller market gets a larger move than gold once the momentum starts. >> No absolutely like lots of interesting things to follow up on. I wasn't aware for example of the China insurance industry being able to allocate to gold now. Um but maybe before we get to that like some of the details here and that that are sort of fueling uh the the price rally right now. But we got to talk about it. It feels like there was a trigger um in in the market just last week uh that set off the rally here and that brought back the excitement and it just cannot be just everybody returning back to work uh today as we record this September 2nd and everybody's excited. There must have been a trigger. David, did you see anything that could have caused that? >> You know, well, I'll have to be honest and say no, but I will qualify it. First of all, a lot of people think that the news, you know, dictates markets. But if you look at socioeconomics, a book that uh Robert Prector wrote, who's an Elliot wave guy, and some others, studies have been done independently, several, and really people have the idea that news drives markets. At times it does, but it's really like 20 25% of the time. So if you look for a news item like you know a breakdown in negotiations or whatever and that's what drove the market again it's buying pressure. Why? We really don't know. My guess would be the idea that the markets were closed in the United States. So that the aftermarket or the smaller markets in uh China in Asia primarily uh a little bit of buying pressure goes a long ways because there's no counterveailing forces going on at the same time. Even though markets open in different time zones, the New Yorkers or people in Chicago or wherever can trade in the GlobeEx, so they can be any market at any time if they choose to do so. So I think that really was probably part of it. That's how I would think about it. But am I right or wrong? I think really in the long term doesn't mean a lot. What it does mean is that it doesn't take much buying pressure to move this market. I think it was up over a dollar yesterday >> on September 1st. And the last thing I have to say with tongue and cheek, but this adage goes on for miles and I put it in almost every report in my May April issue that there's an adage that says sell in May and come back after Labor Day. And believe it or not, that adage holds true very often. And in the April edition of the Morgan Report, I said gold has topped at 3500 and will remain so throughout the summer and uh maybe even longer. And so here we are Labor Day and it just shoots up. So I'm going to do an update for my my premiums members today later after we're done uh talking about here it is. We have proof. It's backing off in the US markets right now somewhat, but it's holding uh a lot of the gains that it experienced yesterday. >> Miners are telling a very different story though. They were uh buy in May and maybe sell now because they've been rallying and we'll we'll get to the miners in a second, but I just wanted to throw that in. uh because they've been performing really well. Physical gold not so much in particular, silver, it's done okay, but uh the breakout is just happening. Um before we get to the miners and other little topics here, $40. Um how important was that price level to break through? Uh a lot of people have been mentioning, oh, we need to get past $40 so we can rally. I heard the same thing about $30, $34. Um how important was the $40 level, David? >> Round numbers in commodities in general are very important. there's a psychology that goes with it. And so whether we're talking soybean, oil, wheat, silver, or whatever, those big numbers are meaningful psychologically. Oh, we got $30 silver now 40 and eventually 50 and maybe 607. Who knows? But it's a big deal. And all we need to see really is uh three or four closes on close of $40 or better in a row uh on this kind of volume. We have a pretty good assurance that the trend is going to continue and that we're going higher. There's not much resistance. There's only I think I read somebody yesterday, one of uh my colleagues u in the you know precious metal space talked about I think it was only about two and a half three months where we've been above 40 on a consistent basis. So we don't have much over much resistance at all. Very few people that bought at that level are really holding now. I'm sure there's some out there, but from a technical perspective and a psychological perspective going hand in hand, you're seeing uh I think a jump probably to I expect conservatively at least 10% more by the end of the year, which would put us at 44 and perhaps 20% more, which put us at 48. Time will tell, you know, maybe this is going to sell off really quickly and we only get, you know, two couple days above 40. I doubt it. I think the momentum is in our favor. It's a I'm laughing. It's after Labor Day. Historically, we see strength into the final quarter of the year. We're not there yet, but we're getting there. So, I just And the miners, and I want to talk about that quite a bit, but the miners are something that really are assurance that we're in a true bull trend. I want confirmation. I want only not only the miners to do well, I want them to do better than the metals. I want to see that two or 3x eventually where they outperform by a factor of you know 3x for example. So if gold moves up 10% top tier miners are moving up 30%. Or if we you know that type of thing and we are starting to see a lot of strength in the miners as you express. >> Yeah lot lots of strength. I'm just looking at my screen today and uh doubledigit uh percentage gains in some of the uh juniors. actually the miners are a bit more muted today in contrast to what I've seen the last weeks actually ever since like mid July and the Q2 earnings um that uh that have really accelerated I think the the momentum here in the minor and maybe we'll we'll stay on that topic for a second I want to you know jumping around too much I'm trying to connect it um but on the minor side like what triggered that rally that outperformance as well I've mentioned before the Q2 earnings felt like an extra fuel to the higher um especially on the the bigger miners. Is that something that you're watching that is starting to trickle down now? >> It is. It's you know I've been in this market more than 40 years and I'm still learning and one historically the miners will usually lead the metal and I say usually because and that's a tip off for somebody that's you know studied these markets. Aha these gold stocks are moving but nothing's happening in gold. We're probably going to see a rally here. Well, that did not take place this time. Opposite occurred. We saw the metals, especially gold take off and the miners were lagging. And I think it has to do with a lot of things, but one of them is that the market is much more sophisticated, a lot more computer trading, a lot of algorithms out there that that do the trading. And the other thing is the value investors still look at one thing or one thing primarily, and that's earnings. Now, the earnings in the gold stocks have been phenomenal, but it hasn't equated into the price of those companies because many of these companies are trading as if gold is at 2,000 the ounce when it's been at, you know, roughly 33 to 3,400 for four months in a row. Row consolidating. And that information is now going where? into the algorithm, into a trading desk, into a hedge fund manager, into the general public, into a whatever pension fund, and whatever it goes, that knowledge is saying, "Hey, I'm a value investor. This is a real value play. This stock has got to eventually kept catch up to the earnings that it is providing that we know we have." And so that is what I think fueled the rally in the gold mining industry. silver lagging but silver actually is a smaller market as we know there are very few pure silver plays if any there's really one silver stock I can think of that's more or less pure silver play the rest are silver plays but they have you know lead or zinc or copper or gold or something combination thereof they're still silver stocks but they get a bigger margin than gold for example at the top of the market Previously uh we saw a PE of a a top tier gold company sell at like 30 PE but a equivalent silver company would sell at a 50p. Well, why? Well, silver is more volatile and I guess it's more loved at the top of a market than gold is. >> I'm not finding it in the coms table. I was curious where we're at um in in terms of valuations um for for the major miners but also some of the smaller producers like where where do you think we're at right now? Do you have an overview? >> I don't I know we're below that I think in some instances. I do want to make a caveat here because a PE is not a very good metric for a mining company. I mean there's a couple big books back there that are hard slogs and valuing a a mining company is much more about free cash flow than it is a PE. PE is useful at the top of the market to get an exit strategy. Can be used, but it really isn't like a retail store selling, you know, women's uh clothing or uh you know, grocery store, what have you. It's not a good metric for a mining company, but people use it. It's nothing against it, but it really isn't the best metric. So I just want to get that into the record because you know that's what we do primarily at the Morgan report is analyze mining companies not just gold and silver but you know lithium cobalt the rare earth elements uh the battery metals you name it copper I'm becoming much more bullish on copper than I was let's say six months ago. Uh so there's a lot happening in the resource sector and one of the best leveraged plays you can do with lower risk not no risk is in the mining equities and you start with blue chips and work your way down into a speculative section where you basically make the correct uh bets meaning how much money you allocate to each tier you can do quite well and have a balanced risk-to-reward profile. Yeah, our audience is probably getting tired of me saying it, David, but I've been harping the pneumont horn uh lately because I'm not I'm not a big fan of the company itself, but it's the second best performing stock in the S&P 500 and nobody's talking about it. >> Yeah, >> right. It's only being bested by Palanteer and uh let me just look at the updated one here. So, Newmont is up 104.5% year to date. Uh Palanteer 106.6. We're c we're closing the gap. Last week, there was a 14% gap between Palanteer and Pneumont. Give it two days, New Pneumont will be the best performing stock in the S&P 500, and nobody's talking about it. It's mind-blowing. So, I'm not worried that we're in any type of euphoria phase. Like, would you agree with that? >> Yeah. And I have to digress, if you allow me. I mean, in 1979, Heckler Mining, which is right over there, I could drive to an hour. their office and and the lucky Friday mine was the best performing stock on the entire NYSE. It went from $5 to $50 in one year. And so I put Heckla Mining in the Morgan report in the early early days, like year two or three of uh publication. And that stock was at about 50 cents and it was in danger of being delisted because there's certain rules for NYC stock they have to abide by. That stock went from 50 cents to $5. A 10 bagger. The same exact metric it did in 1979 when it was published all over the financial press as being the best performing stock. I gave that lecture in Calgary at an oil meeting, oil and precious metals, and said, "Here we are, a 10 bagger. My readers know about it. I'm asking them to cash out at this level." And nobody even knew the word heckle. So, it goes back to what you said. No one was paying attention. And that I think is a very good clearing indicator for everybody listening to this that the bull market is far from over in my opinion because again who's paying attention? Not very many. >> No, like that's the question maybe David as well to follow up on like where is the money now coming from? Is it just us mining investors and speculators that are sending the same $20 bill around or are is there actually new money coming in that is helping us reach these levels? >> It's both primarily. Well, first of all, let's talk about the metals and the miners. So, on the metals, it's almost all institutional buying on both sides, gold and silver. As far as the equities are concerned, it's a few sophisticated buyers like some of the best known names in the hedge fund industry are nibbling at the miners, the top tiers like the Numonts, but it's mostly retail coming back into the market and you know higher price, you know, cure for low prices is low prices. Yeah, it's so true though. And now they're making a move and again no one's really paying attention yet and we've yet to see anything close to the top of the market which means there's that panic manic buying and that in my view is probably a couple of years away but we will start to see more and more interest in these both from the retail and institutional side. >> That's the question like where where is the money coming from? meaning like institutionals they they have to chase returns sadly like and I've mentioned that on the show before. Uh we closed the gap or we closed the dip of the liberation day or people call it the Trump slump um back in April. Um I I was being a bit nasty hoping that we would stay at 4,800 for the year at least on the S&P 500 because I was thinking my mentality was like well it might it might make the 401k money move right into different sectors chase returns which they could potentially get in the mining space like very naively thinking very uh egocentric of course because a lot of my portfolio is in the mining space but uh are we seeing that yet like I don't think yeah people >> there's a I I should have bookmarked them because I love to give credit to other people because you know you should I remember there's a couple guys out of the United Kingdom and they do analytical work on uh strategy and and rotation and the rotation has started into the commodity sector through the equity side meaning your ADMs for food for an example or the mining for you know the commodity sector in minerals And it's a subtle but measurable shift that is taking place. So you know like going back to the ship turning momentum changing. Uh it's very subtle at first. You don't really notice that the you know this big ship with all that mass and the trend is so big and it's got so much momentum. It's very hard to move and change direction. But it is starting to change direction. And that's provable at least by the metrics that these two gentlemen use. And I see it uh by the amount of interest in our work and the kind of calls that we're getting where we're seeing people that were let's say um bigger investors that have probably participated in this massive bull trend in the S&P 500 for for a long long time looking to diversify looking to maybe hedge looking for what the next sector will be and I I see it I feel it and it is measurable. Yeah. How much is left on the table here, David, when you look at performance? Like I don't want you give like investment advice. Hey, we're we're, you know, 200% from the top, you know. Um, but I'm trying to understand like how much room is there left for the miners to run. Um, what is your prediction before we get to talking more about some of the granular details that you mentioned in your intro? Well, uh, from my work and others, it looks to me as if we're in the final leg up in a in a major bull market. And, um, I went and, as you know, we talked about it before we started recording. And I wanted to verify, you know, my work with, uh, with, uh, Elliot wave. And I did. So it said uh you know I had it correct that wave three up there's five waves in Elliot is usually the strongest and most dynamic move in the sequence. It's where the leg prices cover the largest distance and the shortest amount of time compared to the other waves. It's often has the heaviest trading volume. It tends to be the longest and most powerful wave though not always. is driven by a big shift in market psychology which we just discussed disbelief from earlier stages followed by recognition and enthusiasm as more participants jump in. So, since I think we're in the beginning of that leg, we're seeing more and more participants jump in, but we still have a fair ways to go, meaning that retail that's given up on silver, maybe not silver stocks, but very few retail investors that bought even in the 30s are buying in at 40. It's like, you know, I've broken even or I'm slightly ahead. Let's see how far it goes. But institutions need it or industrial users need it. And so that's fueling the market. I think the Asian markets are more involved than they were in the past. Although silver is not nearly as bought on a retail level in the Asian markets as gold is. Regardless, we're seeing that momentum change. And I do think that um we're going to see, as it says, probably the most dynamic move in price appreciation uh in this last leg up. And again, where does it go? I'll say probably a couple more years. And just to be uh sincere, I have said, you know, we got a couple years left more than once and probably as long as five years ago, and I was wrong. But, you know, whenever you stick your neck out, you know, it can be chopped off. But the the facts are back me up now. There was a false start, I believe, in 2016. Uh I can, you know, talk about that. I don't want to, but there were times when it looked like we're going to break into the next leg up and it really didn't carry through. This time it's obvious gold is well above the 2,000 breakout level. It's a thou 134 $1,500 above that, you know, almost not quite a double, but from 2,000 to 3500 is quite a move. And it sustained it and we're breaking out of that consolidation. Wait to remains to be determined if it's a breakout or fake out. We have a couple more days to watch, but no, it's exciting times. >> What could derail the train right now? The silver and the gold train. David, like I'm trying to come up with bare cases, and I've mentioned in other interviews, I'm I'm having a very hard time. Maybe the jobs report in the US is way more positive than everybody believes. Although nobody believes in the jobs numbers anymore, but uh let's uh what is a bear case here? >> Well, the bear case is given by uh Avi Lo. You can look him up. Uh he is a really good Elliot guy. It sounds like I'm a big Elliot wave guy. I'm not. I've studied at a very cursory level. This man has dedicated most of his life to studying Elliot and he's very good at it. But he gave a lecture at the New Orleans conference, the 50th year anniversary of the New Orleans gold show, which is one of the most wellrecoognized and strongest and best gold shows in the world. and he spoke right after the opener, Brian London, uh, about where gold is going. He said it's going to 3500 and that's it. And he sees a multipleyear bare market after that and he sees a strong case for the dollar going up. So, he's definitely a contrarian and he doesn't go into the fundamentals, but after listening to him, I came home and really thought about it because I like to look at both sides as well. And I thought what fundamentally would cause that? And the fundamental case is if we get into a a liquidity crisis where people just can't afford groceries, can't afford grow uh you have to choose between the electric bill and the grocery bill. And we're seeing that. And so what you do is you start to see money become more valuable to the average person or harder to get. And so they start to sell off whatever they have. Not that the average American has gold or silver. They do not. The point being is that if we start to go into a deflationary push, we could see uh these markets cool off. That would be the main fundamental reason that you could see it. And I need to explain that a little more, Kai. just allow me because I wrote about it in the Morgan report a few months back and I explained to people that if the S&P got cut in half for example then that ounce of gold would buy twice as much stock twice as many businesses as it does now without the price of gold changing whatsoever. So the way you need to look at it is not what the paper price of gold is, but what is the value? Meaning how many barrels of oil, how many used cars, how many houses, how many how much stock does this buy? So, I said, for example, if we saw a 5,000 uh factor on the major index and a $5,000 gold price, which isn't that far from 3500, that would be a one:1 ratio using that ratio. And is that unreasonable if we have a big liquidation where a lot of people that have their 401ks or whatever stock market starts to come down rapidly. They don't get out in time. They've seen a great deal of their wealth evaporate. So that is a deflationary situation that could I'm not saying would but could take place. So that's the fundamental case that I wrote about. Not saying it will happen, but as one of my favorite quotes, you've heard me say it before, chance favors the prepared mind. So if I were to see the market tell me, not my thoughts, not obvious thoughts, actually manifest in the market where I saw this taking place, obviously I'd put out an alert to my people and say buy puts, liquidate part, take some profits. I'm not in favor of like shooting the moon and saying, "Hey, I called the top or I believe this is the top." Um, unless I'm certain, which is almost impossible. But if the market's telling me things have changed, that ship is, you know, going the other direction or whatever, or a thunderstorm hit it as a metaphor, you've got to take action. The worst thing that beginner investors do is a round trip. you know, they buy a stock at 10, they watch it go to 80, then they fold it all the way back down to 10. Never do that. You want to protect your profits, and that's one of my main functions for my membership is to make sure we protect profits. >> No, absolutely. Uh although the message should be buy the dip, David, always buy the dip. It's always a dip. No, I'm I'm I'm joking, of course. >> Always buy the dip in a bull market. It's just, you know, but you averaging down will wipe you out better than anything else. I mean, you know, it's not a good strategy in most cases. >> True, true. Let's let's shift to momentum here real quick. Platinum metals or platinum. I know I've seen you post about it on X just the last 24 hours quite extensively, David. Um, very different topic. What What are your thoughts on platinum? >> Well, we were early on platinum and we were writing about the Morgan Report again and again and again. And I said in the April letter, gold's topped out at 3500 at least through the summer. And if you have new funds or you want to add to your positions, buy silver or platinum. And that was president call. I mean, it was like almost not to the day, but it was very close. And so, anyone that bought at that time was up, you know, 30, 40, 50% perhaps. There aren't too many platinum miners. I reviewed a few uh on a verbal update. I do these videos for for members and uh but I like it. Uh how much further it has to go remains to be determined. I think it's going to consolidate here for a while, but it's something that you should buy if you've already got gold and silver. I mean, platinum is not nearly as liquid and it's a super small market, but you pay a price in the physical market on the buy and the sell. You pay a huge premium on the way in and you have to take a discount on the way out. So, you got to know that and be prepared for that. But it is very much a unique metal and it's being uh it's being used more in the quote unquote hydrogen economy which most people don't even know about but primarily in Asia there's been a push not a huge one I don't make a big case about it but people are seeing the discrepancy between platinum being at one time when it was $1,000 and gold 3500 of a you know 3 to1 ratio I mean it's oneird third the price of gold and yet it usually sells at a premium to gold because depending on the stats it's about 15 times rarer than gold that uh why not buy platinum jewelry gold is you know going to cost me this much I can get this platinum necklace that's three times the size for the same money or what have you so there is a push into platinum but not a big one but again with a small market it doesn't take much new buying to force the price higher >> and everybody's got gold already it seems like. So let's diversify a little bit. No. Awesome. David, it was great to catch up with you. It was great to have you back on uh on the show. Obvious question and not sure if our audience doesn't already know where to find you, but just in case, where can we send them? >> Just go to the morganreport.com and all our connections are at the top right of the website. icon for our Twitter feed, I icon for our YouTube channel, icon for our LinkedIn presence, and then uh if you want to see the uh trailer for the documentary, it's at silver sunrise.tv. >> Fantastic, David. Thank you so much for joining us. It's always great to catch up, and we'll have to check in maybe later this year, give a bit of a forecast. What do you expect for 2026, of course. So, we we'll check in with you again. And uh everybody else, thanks so much for tuning in to Soar financially. Silver's broken out. Gold is breaking out at all-time highs. Pneumont is about to reach the top spot in the S&P 500 as we speak. So, lots going on and lots of good news from the precious metals front, but as David said, hedge your bets, look at other opportunities, maybe diversify. Lots of good opportunities out there. The miners are just starting to run and it's still early days, third leg, as he said, in an Elliot wave. Uh really curious what you think as well. How are you positioned? Let us know down below and uh good luck out there. Have fun and uh be safe. Take care. [Music]