Silver Rises Over 120% YTD 
Published: 07-22-2026, 07:31 pm
Gold is down roughly 40% from its January 2026 peak, and bullish sentiment on gold stocks recently hit 7%. According to Adrian Day of Adrian Day Asset Management, those extremes point to a classic contrarian setup: historically cheap valuations, persistent central bank buying, and a pattern of sharp recoveries that has followed every correction like this one.
Gold is down roughly 40% from its January peak. ETF outflows keep accelerating. And on one day last month, bullish sentiment on gold stocks registered at zero. Not 7%. Not 3%. Zero.
Adrian Day is chairman and CEO of Adrian Day Asset Management. He sat down with GoldSilver’s Maggie Lake to work through what those numbers actually mean. His read: what looks like a disaster may be exactly what contrarian investors wait years to find.
Why Are Gold Stocks Down 40% From Their January Peak?
Because gold itself came under pressure, and gold stocks amplify every move in the metal. Three macro forces converged at once. First, the ongoing conflict abroad drove investors into the dollar as a safe haven. Second, higher oil prices reignited inflation concerns. Third, those concerns pushed expectations for rate hikes higher.
As a result, a stronger dollar, a rising CPI, and tighter rate expectations all hit gold simultaneously. That combination has historically been bearish for precious metals. So the selloff is not surprising on the surface.
But there is more to the story.
Day notes that gold did not fall as much as those headwinds would typically cause. Given the dollar’s strength and the oil spike, the metal should have been hit harder. Instead, it held up better than the macro picture would predict. That resilience is a signal worth noting. It suggests the gold market may already be looking past the current stress.
Meanwhile, the underlying inflation problem has not been solved. Higher oil added to an already elevated CPI. It did not create it. Even when energy prices ease, the Fed still faces core inflation running well above its 2% target. Fed Chairman Kevin Warsh has publicly called the central bank’s multi-year inflation record a failure. He took office in May 2026. (Source: Federal Reserve Board, federalreserve.gov; Axios, June 2026)
Yet the Fed’s room to raise rates aggressively is limited. Half of American households live paycheck to paycheck. The private credit market carries real risk if rates move too high. That constraint shapes the longer-term case for gold more than any single month of price action.
The Knowledge That Changes Everything
Two essential guides — yours free. Understand why gold matters and why fiat currencies always fail.
What Does a 7% Bullish Reading Mean for Gold?
Normal bull-bear surveys across stocks and currencies tend to show splits around 60-40 or 65-35. A strong tilt is considered extreme. The dollar, at its most bullish recently, reached 80% bullish. That still left 20% remaining bearish.
Gold stocks are currently sitting at 7% bullish.
That is not just weak sentiment. It is statistically unusual for any major asset class. And three weeks before this conversation, the reading hit zero. For one full trading day, not a single surveyed analyst was calling bullish on gold stocks. (Source: Adrian Day, Adrian Day Asset Management, speaking with GoldSilver, July 2026)
Readings like that are historically hard to sustain. Sentiment extremes at this level tend to precede sharp reversals, not extended declines. That is not a guarantee. But it is a consistent pattern across commodity cycles.
Additionally, the buyers with the longest time horizons are not selling. According to Day, central banks purchased more gold in April than in March, and more in May than in April. That buying continued without interruption through the selloff. Tether is also accumulating. Day says the broader market has not yet fully priced in that story.
In other words, investors most sensitive to short-term price action are leaving. Investors with multi-year horizons are adding.
Is This Correction Different From 1974, 2006, or 2008?
Not particularly. Mid-cycle corrections inside a longer bull market are not the exception. They are the rule.
In 1974 and 1975, Day notes that gold fell approximately 46% from its peak. Mining stocks dropped between 80% and 90% during that period. Anyone who sold, except at the very beginning of the decline, missed the recovery. That recovery was one of the strongest in commodity market history.
In 2006, Day recalls gold going through a significant mid-cycle correction. Gold stocks dropped commensurately before the bull market resumed. Those who held through the drawdown captured a significant multi-year advance.
The 2008 case is the most dramatic. The financial crisis was a full system event, not a typical gold correction. Yet even then, the sector fell sharply and briefly. Within three months of the bottom, according to Day, the entire gold sector had doubled.
Day is direct on this point. If you did not sell in January, it is too late to sell now. The question from here is how to position, not whether to exit.
What Should You Actually Do With Your Gold Position Right Now?
Start with the valuation data. According to Day, senior gold mining companies are trading in the lowest quartile of their 50-year valuation history. That is across every major metric. Prices are down 40% from January. Sentiment is near zero. Valuations are historically compressed. Those three conditions rarely appear together.
For investors who hold gold bullion as an insurance position, dollar cost averaging makes sense now. Central banks are the reference point here. They have added consistently regardless of short-term price moves.
For investors focused on return potential, gold equities offer the most direct leverage to a price recovery. Mining stocks historically move faster and farther than the metal itself. That cuts both ways. Volatility in this sector is not a bug. It is the structure of the asset class. As Day puts it, a 2% drop in the S&P 500 is a bad day. A 2% drop in a gold stock in three minutes is unremarkable.
The practical question, therefore, is position sizing. Size your position so a 40% drawdown does not disrupt your standard of living. That calculation is personal. But making it before the next move is the point.
Watch the Full Interview
Adrian Day and Maggie Lake go deeper on the dollar’s trajectory and the private credit market. They also cover how to think about balancing physical bullion against mining equities. Watch the full conversation above.
Stay On Top of Gold & Silver Prices
Get important market alerts sent straight to your inbox.
People Also Ask
Gold has fallen roughly 40% from its January 2026 peak due to three converging pressures. First, safe-haven demand strengthened the dollar. Second, higher oil prices reignited inflation fears. Third, rate hike expectations climbed as a result. According to Adrian Day of Adrian Day Asset Management, these are temporary macro headwinds rather than structural damage to the gold thesis. Notably, gold fell less than the dollar and oil spike would normally cause. That relative resilience suggests the market may already be looking past the current stress.
When bullish sentiment on gold stocks falls to extremes, it historically signals an exhaustion of sellers rather than a new downward trend. Recently, the reading hit 7%. On one day, it reached zero. According to Adrian Day, speaking with GoldSilver in July 2026, readings this low are statistically unusual across any major asset class. The dollar at its most bullish recently hit only 80% bullish. A 7% reading for gold stocks is in a different category entirely. Sentiment extremes like these have consistently preceded sharp reversals in gold stocks throughout commodity cycle history.
According to Adrian Day of Adrian Day Asset Management, if you did not sell in January 2026, it is too late to sell now. The time to reduce exposure was before the 40% decline, not after it. For investors who are appropriately sized, Day recommends holding through the correction. The deeper question is position sizing. If a 40% drawdown is disrupting your standard of living, the issue is the size of your position, not the decision to own gold. The solution is right-sizing going forward, not selling at or near the bottom.
Yes, by historical standards. According to Adrian Day of Adrian Day Asset Management, senior gold mining companies are currently trading in the lowest quartile of their 50-year valuation history. That is across every standard metric: price-to-earnings, price-to-cash flow, and price-to-net asset value. With prices down approximately 40% from January highs and sentiment near zero, three rare conditions are present at the same time: depressed prices, extreme negative sentiment, and historically low valuations. Day describes this combination as a classic contrarian setup.
History suggests gold stocks can recover sharply and quickly once selling pressure exhausts. According to Adrian Day, speaking with GoldSilver in July 2026, the entire gold sector doubled within three months of the October 2008 market bottom. The 1974 to 1975 correction produced a similarly powerful recovery. Those who stayed invested captured one of the strongest commodity bull markets in recorded history. Mid-cycle corrections in gold bull markets are the historical rule, not the exception. The recoveries that follow them have tended to be faster and steeper than most investors expect.
SOURCES
1. Federal Reserve Board — Kevin Warsh, Chairman
2. Axios — Federal Reserve Chairman Warsh Tight-Lipped on Forward Guidance
3. MetalCharts — Gold All-Time High: $5,590 Record & Every Peak Since 1980
4. GoldSilver — Live Gold & Silver Price Charts
You May Also Like:
- Gold Went Up 600%. Your Mining Stocks Didn’t. Here’s Why.
- Why Does Silver Drop Before Options Expiration? The Monthly Pattern David Morgan Calls “Courtroom-Level Proof”
- Who Wrote the Federal Reserve Act? Wall Street Did.
- What Is Financial Repression? The Four-Move Government Debt Playbook, Explained.
- Mining Margins Beat Google’s. Here’s What That Tells You About Gold.
- Why Is Silver’s Mining Margin So Wide? Tavi Costa Explains
- Is the Silver Rally Over? Tavi Costa Breaks Down the Selloff
- GoldSilver’s New Chapter: What’s Coming Next
