Thomas Winmill, manager of the Midas Fund (MIDSX), predicted in a Barron’s interview that gold will reach $1,800 in 2011, average $1,500, and end the year at $1,600 per ounce.

Winmill attributed recent weakness in the yellow metal to better than expected economic data, particularly on inflation.  Nonetheless, over the next six months the fundamental supply and demand picture is likely to push gold higher.  Specifically, consumers are demonstrating increased confidence, and high gold-consuming nations such as India and China are experiencing higher than normal economic growth rates.  Central banks have also significantly reduced their gold sales relative to previous years.

Over the next several years, Winmill stated that “record deficits and lack of fiscal discipline in Congress, as evidenced by the tax extensions, will add to U.S. debt concerns.  Any resulting weakness in the dollar, along with the return of the inflation specter, will fuel gold’s rise.”