June 4, 2026
The price of gold is taking a breather. With the slide below $4,500 per ounce, the precious metal is currently testing its 200-day moving average—a crucial technical support level. This period of weakness has been triggered by renewed concerns over interest rates. But Tom Winmill, portfolio manager of the Midas Discovery Fund, warns against being blinded by short-term volatility. In an interview with Kitco News, he emphasized: The structural drivers for gold and select mining stocks remain intact.
Interest Rate Concerns vs. Fundamental Strength
Growing inflation fears are fueling market expectations of further interest rate hikes by year-end. This naturally weighs on interest-free gold. Nevertheless, Winmill does not view the current pullback to the 200-day line as a break in the upward trend.
His confidence is based on robust fundamentals, above all the persistently high demand from central banks. Added to this are profound changes in the global monetary landscape. The so-called “weaponization” of the U.S. dollar and efforts toward de-dollarization are increasingly eroding the greenback’s status as the undisputed reserve currency. A dollar that remains weak in the long term would provide additional tailwinds for the gold price.
The Decisive Factor: Real Interest Rates
Winmill sees another key argument in favor of gold in the interplay between inflation and economic growth. While central banks appear rhetorically determined to combat inflation, Winmill doubts they will tighten the reins enough to risk a deep recession.
The result: Real interest rates are likely to remain low or even fall further. Historically, this environment of declining holding costs has been an ideal breeding ground for tangible assets. Gold benefits twice in this scenario—as a classic safe haven in uncertain times and due to the favorable real yield environment. Geopolitical risks and persistent inflationary pressures further support this thesis.
Mining Stocks: Solid Balance Sheets Instead of Cost Panic
The weak gold price and rising costs have also left their mark on mining stocks. However, Winmill often considers concerns about profitability to be exaggerated. Underground operations, in particular, are less dependent on fuel costs and have long since positioned themselves with alternative energies.
According to Winmill, the industry is fundamentally healthier than ever: record free cash flow, strengthened balance sheets, and some of the strongest results in recent years. While rising royalties, higher wages, and financing costs can squeeze margins, the starting point is significantly better than in previous cycles.
Furthermore, the pressure to engage in expensive acquisitions has eased, as higher gold prices have already boosted the value of existing reserves.
For investors, the bottom line is this: the gold bull market is not over; it is merely taking a breather. The lowest point in the valuation cycle for mining stocks is likely behind us.
