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Adrian Day: Depressed Gold Stocks Offer a Compelling Opportunity | INN

“Investors today in my mind have a compelling opportunity when the outlook is so good and at the same time the prices are so low,” said Adrian Day.

Gold has largely trended downward since reaching a new all-time high last summer, but for Adrian Day its retracement is a normal reaction to a major move.

What’s more surprising to him right now is that gold stocks remain so depressed.

“This is what’s so astonishing to me … you look at where we are with gold today. Forget the fact that it’s down US$250 from the all-time high, but look at where gold is today — just under US$1,800 (per ounce) compared with a year ago, two years ago, three years ago, four years ago,” he said.

 

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In that context the gold price is still “extremely good,” continued Day, who is president of Adrian Day Asset Management, especially considering that miners’ input costs are largely lower.

“Investors today in my mind have a compelling opportunity when the outlook is so good and at the same time the prices are so low,” he said, adding that in general gold companies are now better positioned than they were in the previous bull market.

“Normally when prices move up the stocks move too far too fast, and you think you’ve missed it,” commented Day. “All I can say is this is just the beginning in my view.”

Looking at where gold may go, he said right now the most important factor for the yellow metal is money printing, or excess liquidity. Day doesn’t expect any dramatic moves for gold in the near term, saying that it might get to the US$1,850 level in the next few months, but he remains optimistic about its prospects.

“Sometime towards the end of the year — maybe the fall, maybe the end of this year, beginning of next year — I think we’re going to break to new all-time highs again,” he said.

“The scenario for gold, the outlook for gold, the environment is so positive. I think we’re going to see new highs, certainly within a year, let’s put it that way.”

Watch the interview above for more from Day on the gold market.

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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.

 

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