The Gold Report: Last month, the price of gold reached a five-year low near $1,140/ounce ($1,140/oz). Then it rose quickly to over $1,200/oz. Does this tell you the bottom is finally in?
Rick Mills: Gold will probably remain, in the short term, somewhere between $1,000/oz and $1,200/oz. Medium term, when people realize the Federal Reserve cannot raise interest rates and the global economy has serious problems, gold will rise.
TGR: The last time we spoke, you said, “Federal Reserve Chair Janet Yellen has more to do with the price of gold than anything else going on in the world today.” That being the case, what do you make of her recent remarks about losing “patience” and raising interest rates?
RM: Yellen’s impatience reflects a concern regarding low to zero inflation. If rising interest rates are needed to curb inflation, yet there is no inflation, why would Yellen raise rates?
If Yellen does raise rates, that will mean a continuing strong U.S. dollar, and that’s not something I suspect the U.S. really wants to see considering the recent poor earnings statements from the S&P 500. They have been a disaster, and they’re going to get worse as long as the dollar stays strong or gets stronger.
TGR: Over the past four years, metals stocks have performed poorly, even as we have seen enormous growth in the S&P 500 and the broader equity markets in general. Now we are seeing tremendous volatility in the equity markets, which has led some observers to suggest we have a bubble about to burst. What do you think?
RM: The multinationals listed on the S&P 500 have a lot …read more