from Kitco NEWS
Talking with Kitco News at the PDAC convention in Toronto, Adrian Day says he think gold’s rally still has room to go. Looking specifically at gold stocks, Day told Daniela Cambone that this year’s rally is much different from the one seen early last year. ‘In the past few years, particularly last year, what you saw with the spike in gold stocks was short covering, it was virtually all short covering,’ he explained. ‘What you’ve seen this year is different, and it’s not just we haven’t seen the short covering, we’ve actually seen shorts go up on virtually every senior gold stock.’ However, he does caution investors that there is still a chance for some capitulation. ‘We know in the gold market that when stocks correct, they don’t correct by 1% they correct by 5%,10%, or even 15%,’ he said. ‘I’m generally urging people to hold on to what they got, and be cautious about adding more.’ Day also noted that it is important to look at companies’ balance sheets instead of just their stock prices. ‘When the price moves up sharply, companies with the highest debt and companies with the highest cost mines go up the most because they have the most leveraged,’ he explained. ‘So, you have to be careful.’