Dave Erfle- Precious Metals Rebound: Key Technical Levels, Fed Speculation, Mining Sector Valuations

The KE Report Jun 16, 2026

Summary

Gold miners' bullish percentage index hit zero, a washout not seen since 2015, while producers earn record margins near $2,300 an ounce.

Island reversals lifted GDX above 85 and GDXJ above 110; both levels now define the sector's short-term risk.

The Fed faces 4.2% inflation and cannot absorb higher debt service, boxing itself in on either rate path.

Global miners trade near five times EBITDA — a cash-earnings multiple — versus seven-plus in 2023, historically cheap.

Junior developers hold funding into 2027 without near-term dilution as Mexico's concession-first regime speeds permits.

The host cites Agnico's Finland acquisition as one of the few large mining deals so far in 2026, with Dave agreeing that producer managements are still gun-shy on M&A.
The host raises Agnico's high-profile joint venture project as one of the permits that would need to come through for Mexico's improving permitting record to be seen as a durable change.

The host lists Alamos among the companies that have secured amended mining permits in Mexico since the current administration took office.

The host says Buenaventura received a couple of permit amendments in Mexico, part of the early wave of approvals under the new administration.

The host cites the G2 Goldfields takeover by G Mining as one of the few high-profile M&A transactions so far this year.
Dave expects mining M&A to increase toward year-end as cash-rich producers have to put their hoards of ounces to work, though he says dealmakers remain cautious.

Dave cites Newmont as the clearest case for his valuation argument: roughly 9x forward earnings against about 24x for the rest of the S&P 500, and he describes it as the only gold stock in the index.
He argues gold shares are priced as if gold were below $3,000 an ounce even after the $1,600 correction from $5,600 to $4,000, while producers print record margins near $2,300 an ounce.
The host puts Newmont's forward P/E near 10 and trailing near 14; Dave agrees the forward figure is mostly a function of where gold goes from here rather than rising output or falling costs.
He notes the gold mining sector now represents only about 1% of global equity market capitalization after recent gold ETF selling, which he calls a historic anomaly.

The host says Avino received the very first permit amendment in Mexico under the current administration, ahead of the other amended permits he lists.

Dave says Discovery Silver is one of the positions he has held for a long time and that Cordero has become secondary for the stock since the company bought Porcupine, leaving the permit as icing on the cake rather than the driver.
He expects Cordero to be issued and calls it a significant project, noting it is an open pit that would bring a lot of jobs to that part of Mexico.
On the odds, he argues a company that already holds a concession has a pretty good chance of being permitted under the current Mexican government, so for Discovery the open question is timing rather than approval.

Dave says GoGold's underground permit in Mexico had been in his top ten for a while and that he raised the stock to a strong buy for his subscribers on the news.
He notes the company had already done the pre-work and raised all of its financing, so it is now fully permitted and fully financed for construction at Los Rico South.
On a build he describes as roughly 24 months, he expects GoGold to be producing in the second quarter of 2028, funded to production with no debt.
He points to cash flow from existing tailings as the route that lets the company build Los Rico South while moving the Los Rico North project into a definitive feasibility study.
Dave says the company is now in a strong position, with both an open pit and an underground permitting option available for the northern project depending on how Mexico's political climate develops.

The host credits Silver Tiger's open pit permit as the first new permit granted in Mexico since the current administration took office, after earlier companies had only received amendments.
Dave says the pattern matters: the administration's stated rule is that a company holding a concession gets its permit, so he treats pending Mexican permit candidates as likely approvals whose timing is the real question.

Top takeaway Dave argues the bottom is in for gold and for gold-miner shares after the four-month sell-off, and expects gold back above $4,500 by the end of the week if the Fed's tone turns out to be dovish; the main risk he flags is a retest of last week's lows.
He points to the gold miners' bullish percentage index hitting zero, a washout not seen since late 2015 and deeper than the 2020 COVID crash, while producer margins run near $2,300 an ounce and the majors have paid down their debt.
On valuation he cites the global miners' weighted average EV/EBITDA at about 5x against more than 7x at the start of 2023, and the sector at roughly 1% of global equity market capitalization, alongside record profitability, higher dividends and buybacks.
He sees the Fed boxed in, with inflation above the 2% target for five consecutive years and debt-service costs rising, so he frames the decision due the next day as two-way risk: a hawkish surprise would retest the lows, while the FOMC's internal division would be bullish for gold.
He says cashed-up developers and explorers are funded into 2027 and some into 2028 with little or no near-term dilution risk, and expects mining M&A to increase toward year-end as producers must spend their cash, though managements are gun-shy and the industry is short of people to build new mines.