Dave Erfle - Mining Stocks Outperform Metals: Key Technical Levels & Market Outlook
The KE Report Aug 11, 2026
Summary
Mining stocks leveraged gold 3-to-1 last week as GDX, GDXJ and SIL each rallied 20%+ on bullish falling-wedge breakouts from a multi-week base.
Dave argues the 'rate hikes hurt gold' narrative is wrong — gold rose with Fed hikes to 19% in the 1970s and after 2016.
A stagflationary setup — weakening jobs, higher oil, and persistent inflation — historically supports gold; gold ran from $100 to $850 in the 1970s.
Investor takeaway: ease into mining stocks in tranches on weakness, avoid FOMO, and trim positions on big rips to manage volatility through bottoms.
The 18-week moving averages on GDX (85) and GDXJ (110) flipped from resistance to support — confirming a long-term bottom if back-to-back weekly closes hold.
David Erfle's takeaways
- Top takeaway Erfle argues precious metal equities are putting in a significant bottom, citing falling wedge breakouts in GDX and GDXJ, washed-out sentiment, and silver leading gold — though he warns a hot CPI print could trigger profit-taking on rate-hike fears.
- He expects a stagflationary setup — weakening jobs, lower growth, and inflation stuck above the Fed's 2% target for five years — and recalls that gold went from $100 to $850 during the 1970s stagflation.
- He rejects the mainstream narrative that higher rates hurt gold, saying the Fed is behind on inflation; he cites the 1970s (Fed funds at 19% as gold rallied), the 2016 'rip your face off' rally, and the recent eight-week test of $4,000 support as evidence.
- His playbook is to buy in tranches on weakness, never chase, accumulate during healthy corrections, trim profits at predetermined price levels regardless of fundamentals, and hold core positions through the secular bull market.