Adrian Day Sees Huge Opportunity Lurking In Gold Mining Stocks

Photo: Adrian Day Sees Huge Opportunity Lurking In Gold Mining Stocks

Gold mining isn't an easy business. The logistics are hard enough, but today the governments in many nations that are rich in gold are looking to add revenue via taxation, or even nationalization. But there are opportunities out there, and according to Adrian Day, this might be the time to start buying gold producers with quality assets and great management teams.

While gold prices have been basically supportive of gold stocks for more than a year, the shares are still lagging both the broad market, and the appreciation of the yellow metal. Royalty companies that make money from gold mines are doing very well, but the mines that produce those royalty payments can't seem to catch a break. There are many thoughts on why gold stocks aren't doing better, and given their current valuations, Adrian Day might be correct.

In a recent interview at the Hard Asset Conference he talked about the next bull run in gold and gold mining shares, and shared some insights about why the market for gold today is a lot different than the last bull run that started around 2000.

Shrinking Supplies

The last decade has seen a serious lack of development spending on mining in general, and the gold sector has been no exception. Adrian Day points out that mining is an industry that has to constantly replace depleted reserves by finding or buying new ones, and that simply hasn't been happening. This leaves the major miners in a tricky spot, especially if there is a substantial rise in gold prices.

If the last five years has been hard on the big gold miners, it has been awful for the junior sector. There has been little motivation for anyone to invest in the sector that has created at least half of new gold discoveries, and this will probably lead to shrinking supply options in the medium term.

More recently gold ETF's and cryptocurrencies are thought to have impacted investments in junior miner's shares, as well as investment in coins by individual investors. Adrian Day sees this as setting up both gold and gold stocks for a renewed bull market, and now may be the time to get in.

Invest Wisely

While buying into physical gold is straightforward enough, buying gold mining stocks takes a bit more homework to get it right. People like Adrian Day, Marin Katusa and Doug Casey have been able to create outsized returns in past gold bull markets by knowing the companies they invest in. There are still a lot of miners out there, and they won't all perform the same.

If you are interested in learning more about investing in precious metals from some of the most successful resource investors in the world, the upcoming Silver and Gold Summit is the perfect place to be. Adrian Day will be giving a keynote speech, and a number of other investors will be discussing a range of resource investing strategies.

The Summit will be happening on November 20th and 21st, at the Hilton Union Square in downtown San Francisco. There is still time to reserve your spot, and we are thrilled to see what unfolds this year!