Gold Price Struggles but for How Long?

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Speaking at the recent World Mining Investment Conference in London, John Hathaway, portfolio manager of the U.S. Tocqueville Gold Fund, reckoned that gold was likely to be a good investment and gold stocks an even better one.

Commentators around the world are beginning to turn less pessimistic on the global economy, and as Ben Bernanke decreed that dollar devaluation is not US policy, the gold price took a serious knock last week. But, the decline halted above the critical $850 mark and underlying strength seems to have appeared at around the $880 level, as the beginnings of another upward creep seem to be in progress.

Traditionally late spring/early summer can prove to be a weak time for the gold price as US traders and bankers' thoughts turn to summer holidays in the Hamptons, Caribbean and further afield, and some European centres seem to virtually shut down for a full month or more, so it would be unwise to bank on any major price movements until late August or beyond - if then. But the overall fundamentals for a price increase are still present and many analysts, even conservative ones, are looking for the $1,000 an ounce level to be breached again later in the year.

There have been two important conferences in London in the past couple of weeks attended by some of the world's leading thinkers and analysts on gold and gold stocks. The first was the FT's one day gold conference and the second the two day World Mining Investment Conference. In general the consensus at both these events was that the gold price could be due for another upwards run later in the year, although many of the speakers were perhaps more inclined to the bullish viewpoint due to their own involvements with gold mining companies and specialist gold investment vehicles and funds.

As an example, the well respected John Hathaway, portfolio manager of the U.S. Tocqueville gold fund, speaking at the latter event, reckoned that gold was likely to be a good investment and gold stocks an even better one. As a gold fund manager he was, to an extent, talking up his own book, but he has a good track record and his views should definitely be taken seriously as there is good research behind them...

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