From Gold to Vanadium to Uranium, the Mercenary Geologist Has His Preferences

Mickey Fulp, the Mercenary Geologist, and Maurice Jackson of Proven and Probable discuss the resurgent precious metals markets, as well as base metals, critical metals and energy metals.

Maurice Jackson: Joining me for a conversation today is Mickey Fulp, the Mercenary Geologist. Glad to have you here today to share your market insights, which are quite remarkable. And, I want to get your thoughts right now on the gold price. The market seems to be quite exuberant at the current price of $1,400 per ounce. Is $1,400 the new floor or is it a head fake?

Mickey Fulp: I'm being increasingly convinced it's a floor because no matter what the U.S. dollar seems to do—I mean the U.S. dollar's up 150 points or more over the last month or so. And, despite its perturbations on a daily basis, gold's hanging in there. Hasn't even gotten close to breaching $1,400 for quite some time. So, it was a bit iffy. So, there's certainly resistance on the downside in the $1,385 range. What's the resistance on the upside? Well, probably $1,415. We're pushing that this morning.

Maurice Jackson: We certainly are.

Mickey Fulp: We keep establishing new six-year highs, and it was six years ago since gold even approached these sorts of values. You know, as a geologist, exploration geologists do have to have an eternally optimistic side. Maybe that's coming out. But [it's] looking better—if we can get through to Labor Day and then through the return of everybody to the market, let's say by the precious metals summit and Beaver Creek Colorado in late September.

If we can get through that, then I think it could be onward and upward for gold because then you have seasonal factors coming into the equation—Indian wedding and festivals specifically. And then the love trade comes into the Western world—those two or three weeks before Christmas where we all tend to buy our loved ones gold-bearing bling.

Maurice Jackson: I don't know if my wife would agree with that but, honey, I will get you something this year. Mickey, how about silver? Any thoughts on silver?

Mickey Fulp: Well, silver's lagging behind and the gold-silver ratio is starting to go down. But, a month ago it was well above 92, and that is extremely rare territory. I think about 2% of the time since Nixon took us off the gold standard in 1970 has the gold-silver ratio been that high. It's about 87 right now. You noticed overnight or yesterday, when gold popped a little bit, or even this morning when it's kind of gone another leg up, [that] silver hasn't participated in this last little run here.

Maurice Jackson: I know you're not the biggest fan of silver, if I'm not mistaken, but would you actively be buying silver right now?

Mickey Fulp: Well, if I had a choice of buying gold or silver right now, I'd be buying silver because it's undervalued with respect to gold. That ratio, the mean, the median and the average are both about 55 to 56, and so you know, that ratio will come into play at some point, again. If you buy silver now and that ratio normalizes, then you trade in your silver for your gold. The other thing that's going on right now is numismatic gold coins are selling at not much over the markup for a current bullion coin from the government. I actually picked up a couple of numismatics yesterday, so I've already got the bling for my girl.

Maurice Jackson: I have as well. Regarding gold numismatic coins. I like divisibility so I don't usually go for the one-ounce. I like the half-ounce gold numismatic and one-tenth platinum, which the one-tenth actually leads to my next question for you. And, that is platinum. What are your thoughts on platinum?

Mickey Fulp: Well, I bought some platinum back in January, I think when it went below $800/ounce. It's now made triple bottoms below $800 in the last year. So, triple bottoms, as the charts will tell you, that's when you want to buy. When it made its last little foray under $800 was month or five weeks ago, if memory serves, and now it's at $850 again. That's another buy. It's good time to buy platinum.

Palladium dropped $100 bucks overnight or yesterday. I think that must solely be due to a bunch of longs [getting] shaken out of market when Trump put those additional tariffs on, because palladium is an industrial metal. It's not a precious metal. So it lost, dropped like a rocket yesterday.

Maurice Jackson: Now, I would be remiss if I didn't ask you, because my e-mail box will be inundated with why didn't you ask Mickey [if] he's going to buy silver or platinum? Of the two, which one would you prefer to buy?

Mickey Fulp: Oh, I don't know. I just buy silver coins kind of willy nilly. I bought bags of junk silver in 2008–2009, so for me, buying silver, I just buy a few coins here and there. But, if I was going to buy a significant amount of precious metals right now personally, I like those platinum philharmonic coins. Some beautiful coins.

Maurice Jackson: And, just a little insight for those [reading] as well, if you're looking at silver. I get this question asked as well: What has the lowest premium right now? The answer is junk silver. Junk silver right now has the lowest premium.

Mickey Fulp: I was unaware of that.

Maurice Jackson: Yes.

Mickey Fulp: So, it's always good to have a bag of junk silver around.

Maurice Jackson: It certainly is. When silver is out of favor—most people don’t realize this—it is junk silver that has the lowest premium. When silver is in favor, it's the junk silver that has the highest premium.

Mickey Fulp: Oh, you should know, as a dealer for our buddies at Miles Franklin.

Maurice Jackson: Absolutely. Let's switch the conversation. Let's go to base metals. What has your attention in base metals?

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MARKET SUMMARY

INDICES

Name Last Change
DOW 27909.60 0.38%
S&P 500 3135.96 0.32%
NASDAQ 8621.83 0.40%
TSX 16950.85 0.27%
TSX-V 537.49 0.00%

Resource Commodities

Name Last Change
Gold 1467.59 0.44%
Silver 16.68 0.60%
Copper 2.76 2.759
Platinum 901.00 0.67%
Oil 59.02 0.30%
Natural Gas 2.23 4.57%
Uranium 25.80 0.00%

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