Major miners like Newmont (TSX:NGT,NYSE:NEM) and Yamana Gold (TSX:YRI,NYSE:AUY) ran higher in the first few months of the year, but their gains didn’t trickle down to gold juniors.
“I think now we can look back at the period of time from say, January to April, as a head fake in our space. It head faked me too,” said John Feneck, portfolio manager and consultant at Feneck Consulting.
Speaking at the Prospectors & Developers Association of Canada (PDAC) convention, he told the Investing News Network that ultimately the juniors will follow their bigger counterparts along for the ride.
“What I think will predicate that is a stock market decline of some substance,” he explained. “People then will start moving more money into gold and silver, and then more money into the larger-cap stuff, which will then bleed down into the smaller-cap names. It’s just going to take some time.”
Feneck is holding 2 percent in cash right now, and said that’s because he expects this type of move to happen later in 2022 — not several years down the line.
“If you look at the ’08 crash, Lehman Brothers happened and it took months for the VanEck Junior Gold Miners ETF (ARCA:GDXJ) to actually rebound. It took months,” he said. “Right now we’re kind of in that phase — people are coming to grips with the market correction — GDXJ isn’t going to go through the roof.”
That said, positioning ahead of time is key — Feneck noted that from about December 2008 to June 2009, GDXJ rose nearly 180 percent. “That’s how we are positioned right now,” he said.
Watch the interview above for more of his thoughts on the junior resource space, as well as updates on US Gold (NASDAQ:USAU), Gold Terra Resource (TSXV:YGT,OTCQX:YGTTF), Golden Minerals (TSX:AUMN,NYSEAMERICAN:AUMN), Group Ten Metals (TSXV:PGE), Clean Air Metals (TSXV:AIR,OTCQB:CLRMF) and Canadian Palladium Resources (CSE:BULL,OTCQB:DCNNF).
You can also click here for our recap of PDAC, and here for our full PDAC playlist on YouTube.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.