In this KE Report Pre-Market Daily Editorial, we’re joined by Dave Erfle, Founder and Editor of The Junior Miner Junkie, to discuss one of the rarest events in the silver market - backwardation, where spot traded above futures by nearly $3 last week - as silver held firm above $50 and gold stayed above $4,000/oz.

Key Discussion Highlights

Historic Silver Setup:

Silver’s 45-year cup-and-handle breakout finally confirmed, with spot prices briefly exceeding $53 before futures realigned. Dave explains how this reflects an acute physical shortage, echoing only a few past moments in history such as 1979 and 2011.

Structural Deficit and Demand Shift:

Silver has entered its fifth straight year of supply deficit, driven by record industrial demand (now ~60% of use) and renewed investor interest. Combined with declining confidence in fiat systems, it’s fueling what Dave calls a “perfect storm” for the metal.

Gold at $4,000 and Investor Psychology:

Despite hitting long-term targets, pullbacks are quickly bought—showing a market driven by momentum and global distrust in institutions. Dave notes that most mining executives still seem in disbelief, hesitant to update project sensitivities to current $4,000 gold and $50+ silver realities.

Miners’ Margins Exploding:

Producers like Newmont (NEM) are benefiting from higher metal prices and lower diesel costs. Dave points out how a falling gold-oil ratio is expanding margins and why upcoming Q3 and Q4 results could surprise to the upside.

Best Opportunities Now:

Dave continues to favor early-stage, higher-beta juniors with updated or maiden resource estimates and near-term PEAs. Optionality plays - projects once marginal at lower metal prices - could see massive re-ratings if current prices persist.

Why M&A Is Lagging:

Even with record cash flow, majors remain cautious after past-cycle mistakes. Dave believes takeovers will come later, but for now, many developers are choosing to build mines themselves, hiring teams and securing financing independently.

Macro Tailwinds Remain:

Rate cuts amid rising inflation, debt burdens, and geopolitical instability continue to support gold and silver. Dave sees corrections more likely in time than price, with long-term momentum firmly intact.

 

Stocks / ETFs Mentioned:

GLD, SLV, GDX, GDXJ, NEM

 

Click here to visit the Junior Miner Junky website to learn more about Dave’s investment letter. 

 

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Investment disclaimer:

This content is for informational and educational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security. Investing in equities and commodities involves risk, including the possible loss of principal. Do your own research and consult a licensed financial advisor before making any investment decisions. Guests and hosts may own shares in companies mentioned.