Gold’s rally has yet to translate into miners’ typical torque to bullion, Puerto Rico-based Adrian Day Asset Management says.
With gold up about 60% this year and senior producer equities a little over 100%, the sector is still lagging its historic leverage because buyers to date have favoured bullion over equities, CEO Adrian Day argued last month at the Mining Forum Americas in Colorado Springs, Colo.
“The rotation by ordinary investors and generalists could drive the next leg up,” he told The Northern Miner’s Western Editor, Henry Lazenby.
The VanEck Gold Miners ETF (GDX) and VanEck Junior Gold Miners ETF (GDXJ) have shown consistent net inflows in recent weeks, Day said. Capital trimming the “Magnificent Seven” tech stocks on stretched expectations may benefit miners, the fund manager said.
For new investors to the space, Day favours the royalty and streaming model as lower-risk exposure, highlighting Franco-Nevada (TSX, NYSE: FNV), Wheaton Precious Metals (TSX, NYSE: WPM) and Royal Gold (Nasdaq: RGLD).
Watch the full interview below:
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