DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Gold may have stumbled in recent weeks, but seasoned investors are not ready to declare the rally over.

According to Tom Winmill, portfolio manager of the Midas Discovery Fund, gold is simply “taking a breath,” and the forces that pushed it higher in recent years remain solidly in place.

The latest pullback has seen prices test their 200-day moving average, stirring uneasy nerves across the market. However, what some view as a sign of weakness, others see as a technical reset that sets up the precious metal for its next leg higher.

Winmill argues that gold’s long-term story remains unchanged, even in a climate clouded by inflation pressures and central bank uncertainty.

Here's What They're Not Telling You About Your Retirement

The idea that increasing interest rates could permanently derail the gold trade, he said, does not hold much weight when considering the global monetary backdrop.

For one thing, the race to secure real purchasing power is intensifying as structural risks mount in the world economy.

Central banks are continuing their unprecedented accumulation of bullion, a signal that the sovereign world distrusts fiat money more each year.

“I really don’t see a lot of things that could be bearish for gold in the long-term at this price level,” Winmill said. “It could be a second wind here for gold.”

This Could Be the Most Important Video Gun Owners Watch All Year

Part of his optimism stems from what he sees as a deepening crisis of confidence in the U.S. dollar’s status as the global reserve currency. He cautions that Washington’s growing habit of using the greenback as a political weapon has accelerated the global trend toward de-dollarization.

“With the weaponization of the dollar and the de-dollarization of global GDP, this trend could be in place for a while,” Winmill explained. He believes the dollar’s loss of prestige ultimately strengthens gold’s case, since a weaker reserve currency increases the allure of hard assets that cannot be printed.

According to Winmill, that erosion in trust has given central banks worldwide an incentive to keep buying gold, providing a reliable floor under prices even as speculative traders take profits at the margins. Countries from China to Poland have been active buyers, diversifying their holdings and signaling a longer-term structural shift in the global monetary system.

At the same time, inflation remains a persistent thorn in the side of major economies. Winmill believes the world’s central bankers will likely hesitate before pushing rates so high that they trigger deep recessions, a scenario that keeps real rates relatively low—a historically bullish combination for gold.

“The next move is probably going to be lower real rates,” he said. “And if that happens, hard assets look a lot better because there’s less opportunity cost.”

That environment bodes well not only for bullion but also for gold miners, which have faced skepticism despite generating strong cash flow in recent quarters. Rising energy costs and inflation have challenged margins, yet Winmill contends that investors underestimate how much leaner and smarter today’s mining companies have become compared to previous cycles.

Many operators, he noted, adopted alternative energy solutions years ago and now enjoy more insulation from oil price swings than before. “A lot of the mining companies embraced alternative energy years ago. This isn’t their first time dealing with higher oil prices,” he said.

Winmill’s view is that the sector’s health remains robust even if profit margins compress slightly. Higher royalties, labor costs, and financing expenses may trim some of the excess, but operational discipline and strong balance sheets have put miners in an enviable position.

Revenues, he added, are likely to continue increasing, even if margin expansion slows. That makes it a market favoring careful operators over speculative players—a return to fundamentals that rewards companies managing capital efficiently rather than simply chasing ounces in the ground.

He highlighted Agnico Eagle as a standout example of management discipline in the industry. “That’s what a real management team does,” he said. “They’re focused on reducing costs even while generating enormous cash flow.”

The absence of large-scale merger and acquisition frenzies among top-tier producers is, to Winmill, further proof that the industry has matured. Higher gold prices have already expanded reserves, reducing the urgency to buy new assets simply to chase growth.

“Some of the big guys have more ounces than they’ll be able to mine for decades,” he observed, pointing out that the most successful outfits are those that manage existing resources prudently.

For investors still sitting on the sidelines, Winmill sees opportunity—but insists that selectivity has never mattered more. “The real trough in the valuation cycle has probably passed,” he said. “But there are still some good bargains left.”

His conclusion is clear: gold’s lull is temporary. The fundamental backdrop of rising geopolitical tension, persistent inflation, and growing distrust in fiat currencies remains intact. For disciplined investors, the pause may be the chance to prepare for the next sprint higher.

As Winmill put it, “We’ll catch our breath and then start running again.”

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.