Post by
lifegoeson on May 06, 2023 12:21pm
Wild ride for Gold and Silver this week.
Tocvan closed strong on Friday at $0.64 on 46,000 shares, with about 320,000 shares trading for the week. There was a slight pullback from the $0.70 range this week, but it looked like many of the smaller trades were from BOT's and/or a combination of short sellers constantly buying and selling for pennies in a very narrow range.
I noticed the short ticket for the end of April increased from about 30,000 to 80,000 shares. This isn't a significant number of shares but it does suggest the short term traders are getting impatient, thus pressing down prices to take advantage of the low float. But I believe this bodes well for Tocvan as nothing has changed. The bulk sample should be fully underway and I suspect the drills will be turning soon at both Pilar and Picacho.
The big story in my opinion is the breakout of gold over $2,000 again this week. Look at the trading yesterday, the markets were sharply up creating a mirror image downward drop for both gold and silver (chart's below). Gold bounced off the $2,000 mark and recovered, establishing a supply and demand bottom.
The US markets were supported by strong employment numbers released on Friday, allowing the brokers and traders to press buyers into the market in an effort to increase trading opportunities. It will be interesting to see what happens next week as the big oil companies report earnings, which I suspect will also be very positive due to strong crude pricing.
The US Feds are still trying to tame inflation and raised interest rates to 5.25% this week. The banks continue to be a concern, however, there is another problem starting to emerge - the big story developing is the sub-prime auto defaults - they say it is on a path to the 2008 crisis levels. The US has been living off basically ZERO interest rates, this is now becoming a significant wakeup call as car loans rise out of the reach of many, and defaults are increasing exponentially. I suspect this will weigh heavily on the markets at some point, pushing the price of gold higher.
All of this bodes well for the price of Gold and Silver, which if you haven't figured out yet, increases the profit margins for Tocvan when Pilar starts production, and increases the value of Pilar if someone decides to acquire it. I believe base metal prices are going much higher as demand is very strong from banks and commercial demand.
As my dad always said, "there will be a trickle down of money into the juniors when the price of gold increases as investors will look to leverage their profits into less expensive emerging plays".
Tocvan is no longer a "Greenfield" early stage company but rather a company entering into a well advanced development phase nearing a production decision.
I end with this thought, what will happen to the junior resource sector if gold reaches $2,500 or even passes $3,000? The world has never been in a place like this before, wars on multiple fronts, constrained Global trade, record population growth, and record inflation - combine this with automated trading systems - this is the perfect storm for rising gold and silver prices.