Eddy Elfenbein notes today that gold has dropped below $900 an ounce. Gold funds in general are suffering, with the biggest of them all, the $8.2 billion Merrill Lynch World Gold, down 10% in March. But they’re still bullish:
The Midas Fund, managed by Thomas Winmill in New York, fell more than 11 percent last month, leaving it 4.1 percent down this year.
“As the gold price recovers and exceeds recent highs, we expect Midas Fund to outperform,” Winmill said in an e-mailed message yesterday.
When gold exhibits this kind of volatility, it’s not for risk-averse investors, no matter how much the goldbugs say that it’s a safe haven. Given how risk averse the IMF is, I think that selling the Fund’s gold reserves is still a pretty good idea.