Prins says gold still headed to $6,000 despite selloff

Gold remains on track to reach $6,000 an ounce around the turn of the year despite the recent pullback because paper trading, rather than weakening physical demand, drove the decline, macroeconomist and Permanent Distortion author Nomi Prins said.

Prins made the comments on MINING.COM’s Top of Mine after silver rebounded with three straight daily gains to trade back above $57 an ounce following a sharp correction from nearly $122. She reiterated her January forecast for $120 silver, saying the retreat followed heightened tensions around the Strait of Hormuz rather than any change in the market’s underlying fundamentals.

“The silver producers that take ounces out of the ground cannot get it to the hands of real end buyers in India, the Middle East, in China fast enough,” Prins said.

Prins argued that physical demand continues to outstrip supply despite heavy paper trading in precious metals. She said trading in the iShares Silver Trust represents between 5 billion and 10 billion ounces annually compared with roughly 820 million ounces mined each year, while the silver market remains in its sixth straight annual supply deficit before accounting for future demand from artificial intelligence data centres and emerging technologies.

She said copper reinforces her longer-term outlook because it trades more closely to physical fundamentals. Prins expects copper to reach $7 a pound by year-end after climbing as high as $6.71 in May, noting utilities often secure supply years before construction begins and the market is less influenced by speculative paper trading.

Buying ahead

Prins said governments are increasingly replacing markets as the dominant force shaping commodity prices, a theme she explores in her forthcoming book Commodity Wars. She pointed to Washington’s support for domestic rare earth supply chains as part of a broader effort to challenge China’s decades-long investment in critical minerals.

She also expects the US Federal Reserve to leave interest rates unchanged at its next two meetings, arguing inflation continues to ease as oil prices remain in the $70 to $80 range. Even if policymakers unexpectedly tighten further, she said her bullish outlook for gold would remain intact.

Prins expects major gold producers to generate strong cash flow during the current earnings season as companies including Barrick Mining (TSX: ABX)(NYSE: B) and Newmont (NYSE: NEM)(TSX: NGT) continue selling gold near record prices while maintaining production costs well below current bullion prices.

“They’re going shopping,” Prins said. “They’re buying mining projects down the curve, junior developers, junior explorers, prospects, companies in gold.”

She acknowledged that her $120 silver target appears aggressive after the recent correction but argued the metal nearly tripled from about $40 over the past year and remains supported by a structural supply deficit despite continued price volatility.

“It’s really an interesting volatile time, but if you can stomach that, the upside is quite high from here,” Prins said.