Spot Gold Price Outlook
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Tom Winmill of Midas Funds. Since 2002, Mr. Winmill has served as the portfolio manager of the firm’s Midas Fund (MIDSX), a precious metals equity mutual fund that’s currently up more than 86% year-to-date. Here is what Mr. Winmill forecast for the gold:
Prices have already come up beyond my target for this year, which was $1,100/oz. While I think it’s difficult to call short-term prices, whether it’s gold or jellybeans, we do think that this run-up in gold prices has not been associated with the euphoria that was seen when it topped out in 2008 and 2007; you know, when it got very spiky highs and then spiked down again. So we’re continuing to project an average price of $1,200/oz in the first quarter of next year. It’s probably going to correct down, though. I’d say it’s going to be in a +/- $50 range for the next two or three months, and it’s going to reflect the short-term “fear factor,” which will depend on daily headlines. So that’s hard to predict.
In the medium term however—to the extent that the jewelry fabricators have left the market because of the higher price of gold, particularly in rupee terms, and now their inventory stocks are probably lower than average. But people will continue to get married, will continue to have Christmas and Hanukkah and Chinese New Year and Diwali and so forth, so there will be gold orders that need to be filled.
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