Gold Got Dumped for Cash, That’s Exactly Why You Own It | Adrian Day

Key takeaways

Adrian Day said the sell-off in gold and gold-mining shares was largely a liquidity event, triggered by sharp declines in AI stocks and other assets—not evidence that miners’ margins had disappeared. He remains bullish on gold’s fundamentals but cautioned against expecting a rapid, V-shaped recovery.

He sees gold-mining companies as financially stronger than ever, with high cash flows, lower debt, and disciplined management. For investors who already own physical gold, he considers gold-mining shares the better value at current levels. Royalty companies are a lower-risk way to gain exposure, while individual miners can offer more direct operating leverage.

Market and company context

• Gold fell more than 3% intraday and briefly dropped below $4,000. Day discussed prices around $3,800 and said the next significant support area could be $3,600–$3,650. A further decline or consolidation could take 2–6 weeks; he did not expect a one-day V-shaped rebound.
• Agnico Eagle reported Q3 support costs of about $1,648 per ounce. Day said higher diesel costs could add roughly $80 per ounce in 2027, but argued that even at gold prices of $3,600, miners would retain substantial margins.
• Agnico had reportedly hedged or otherwise covered about 67–70% of its diesel needs for the year at much lower prices. Day said its hedges were relatively favorable, but the protection could run out next year.
• U.S. diesel futures were cited at about $4.84 per gallon, up 2.5%.
• Exxon was described as reporting a record $9.05 billion in quarterly revenue from its refining business, nearly five times the year-earlier figure. The interview also cited Exxon’s $20 billion annual share-buyback program.
• Day said mining costs are more exposed to energy prices at open-pit operations than underground mines. In broad terms, he characterized North American mines as less protected than some other regions and Latin American mines as particularly vulnerable, while stressing that this was a generalization.
• Gold and silver shares had been priced too optimistically in January and February, in his view, but he still described gold-stock valuations as near historical lows—within roughly 10% of their historical lows.
• He said gold mining had the fastest cash-flow growth of any of roughly 150 S&P subsectors over the previous three years. He also characterized the sector’s balance sheets and management discipline as stronger than ever, with less debt and more disciplined acquisitions than in 2011.
• Silver was down nearly 6% and platinum more than 4% on the trading day discussed. Intel was cited as down 22%; Day noted it had not exceeded its 2000 high until earlier in the current year.
• Day expects gold and gold shares to recover after past market shocks, citing 1974, 1997, 2000, and 2008 and estimating that gold and gold stocks had gained 50–100% over the following 12–18 months in such episodes. This was a historical comparison, not a guarantee of future performance.

Investment views and portfolio approach

• Gold versus oil: Day was not buying oil at the time, expecting oil prices and oil shares to weaken when the Iran war ends. He viewed oil as inexpensive over the long term but preferred to wait for a lower post-war price. He considered gold’s risk-reward more attractive for the coming year.
• Commodity-cycle view: He said gold tends to lead early in a commodity cycle, other commodities in the middle, and gold and silver again near the end. He thinks the market is entering a phase in which uranium, copper, oil, and other base metals could outperform gold over the next couple of years, though he did not expect oil to outperform at its then-current price.
• Uranium: Day said his firm began buying uranium shares about a month earlier, increasingly aggressively, because uranium prices and uranium equities seemed unusually disconnected. He expected uranium prices to rise over the next 2–4 years, absent a collapse in the underlying commodity price.
  • He named Cameco and NextGen (likely NexGen Energy) as purchases.
  • He also used a Sprott uranium-miners fund for smaller client allocations—described as accounts with about $10,000 invested in uranium—and bought individual shares for larger allocations.
  • He cited a possible Westinghouse IPO as potential value for Cameco: some analysts, he said, believed the IPO might be valued above Cameco’s existing market capitalization. Even a less successful IPO could, in his view, represent at least 50% of Cameco’s market capitalization.
• Gold equities and royalties: Day called royalty companies a more conservative way to invest in the sector, while noting that they still have growth potential. He said royalty companies had held up better than large producers, and large companies better than smaller ones, during the sell-off.
  • He cited Franco-Nevada as a long-term holding and said a restart at Cobre Panama could materially increase its streaming revenue.
  • He said Franco-Nevada gets about 20% of its revenue from oil and gas, which can partially offset energy exposure elsewhere in a portfolio.
  • He said he would consider Agnico Eagle an exceptionally attractive buy if it fell to $150.
  • He said that if an investor already owns physical gold and wants to add exposure, gold stocks look like a better buy than additional gold at current levels. For someone new to gold, he would start with physical gold.
• Diversification and cash: For an investor with $50,000 in one gold-stock fund, Day said he would avoid putting everything into a single fund and generally advised staying invested rather than selling in a panic. His firm had cash available after reducing positions somewhat in January and receiving cash from two holdings redeemed in May and June. He said he would deploy some cash at lower prices but would not spend it all or buy indiscriminately on the day of the interview.
• Investor behavior: Day warned that investors who sell everything during a downturn often struggle to re-enter. A stock that falls from, for example, $20 to $12 may rebound before a sidelined investor is willing to buy it again.
• Dividends and buybacks: He generally prefers miners to use cash to grow their businesses rather than raise dividends. Mining is capital-intensive, and distributing cash only to raise new capital later can lead to dilution; dividends may also create tax costs for investors. He said he wants shareholder returns to come primarily through business growth and share-price appreciation.
• Selling discipline: His stated rules were to sell or reassess if the company departs from its strategy, the original reason for owning it disappears, or key management changes. If a stock rises much more than expected on good news—for example, 18% rather than an expected 4%—he may trim the position.
• Purchase discipline: When buying a stock, he writes down two or three short sentences explaining why he is buying and what would change his mind. He uses this to reduce hindsight rationalization and check whether the investment thesis remains intact.

Macro and asset-allocation views

• Day expects generalist investors to reconsider gold and other assets if the S&P 500 declines for two to four months in a row, rather than continuing to rise month after month. He said even a relatively small inflow could have an outsized effect on gold because its market is much smaller than large technology companies such as Nvidia.
• He sees value in non-U.S. equities, especially smaller markets, and cited the MSCI World ex-U.S. as a broad comparison. He mentioned Singapore, Hong Kong, and Brazil as examples of markets he finds more attractive.
• He said value stocks had underperformed growth stocks for about 12 years, a historically long period; over a longer, roughly 100-year period, value had outperformed growth.
• Some investors might move into defensive sectors such as utilities or consumer staples, while others could rotate into raw materials.
• His firm holds short-term U.S. Treasury securities and cash, particularly for more conservative accounts. He emphasized that allocations depend on a client’s overall resources and needs: the same account size calls for different risk-taking if one client has substantial assets elsewhere and another depends on that money for life.
• He said a possible shift in political control could weigh on miners because of market perceptions of regulatory or tax changes, even if some policies are administrative rather than legislative. He raised the possibility of higher taxes, including windfall-profit taxes, as a risk.

Physical gold, ETFs, and crypto

• Discussing a reported hack of Binance, Day argued that physical gold cannot be hacked, though it can be stolen. He said owning gold directly provides more control than relying on another party to hold it.
• The interview reported that Tether had frozen stolen tokenized-gold tokens. Day said that, given the limited information available at the time, this could have been a precaution; he also said it highlighted the difference between personally held physical gold and a tokenized claim.
• Day said gold ETFs can make sense for trading or retail convenience, but physical gold is preferable for savings and long-term accumulation.
• He noted that Binance had announced it would cover losses from its balance sheet. The interview did not establish further details about the reported incident.

Companies, assets, and instruments mentioned

• Companies: Exxon; Agnico Eagle; Franco-Nevada; MAG Silver; Altius; Cameco; NextGen/NexGen; Sprott; Origin (company name as heard in the subtitles; possibly a transcription error); Lara; Orion; Fox River; Whitecap; Intel; Nvidia; Westinghouse.
• Commodities and real assets: Gold, silver, platinum, copper, uranium, oil, diesel, and physical gold coins or bars.
• Markets and instruments: S&P 500; MSCI World ex-U.S.; U.S. short-term Treasuries; gold ETFs; a Sprott uranium-miners fund; tokenized gold; Bitcoin and other crypto assets.
• Company ticker symbols were not spoken in the subtitles.

Disclosures and cautions

• Day disclosed that his firm owned Exxon and Agnico Eagle, with Agnico among its largest holdings. He also referred to owning gold ETFs and named shares his firm owned or would consider, including Franco-Nevada, MAG Silver, Altius, Origin, and Lara. He said the firm was buying Cameco and NexGen.
• He described his firm as a discretionary manager and noted that some funds must remain substantially invested, while individual accounts may hold more cash.
• Day said two holdings were redeemed for cash in May and June, freeing cash in client accounts. He identified them as Orion and Fox River, while avoiding any claim about whether the transactions produced a profit.
• No general “not financial advice” disclaimer appeared in the subtitles. Day’s price levels and investment views were his opinions, and he cautioned that he would not buy everything at once or base decisions on temporary factors.

Presenters and sources: Jeremy Szafron, Kitco News anchor; Adrian Day, Adrian Day Asset Management. The coverage was presented with support from Dakota Gold.