Mancini Sees Gold Reaching 5000 Dollars as Miners Generate Cash

Rising energy costs and persistent inflation are delaying gold's potential advance to $5,000 an ounce, but mining companies remain positioned to deliver substantial profits, according to Chris Mancini, co-portfolio manager of the Gabelli Gold Fund. In an interview with Kitco News published October 22, 2026, Mancini said disruptions to oil shipments through the Strait of Hormuz and restrictive Federal Reserve policy have created a temporary obstacle for gold prices, while mining shares continue to trade at valuations he considers unusually low.

Mancini said gold might already be trading at $5,000 an ounce if the conflict in Iran and the resulting energy supply disruptions had ended during the summer. Higher oil prices have intensified inflation concerns, strengthening expectations that the Federal Reserve will continue raising interest rates.

However, Mancini expects elevated borrowing costs and energy prices eventually to weaken economic growth, potentially forcing the central bank to reconsider its monetary policy. He also identified deteriorating employment conditions as a possible catalyst for gold's next major advance.

As gold producers prepare to report third-quarter earnings, Mancini expects strong financial results and substantial free cash flow despite rising operating expenses. He cautioned that higher energy and labor costs could cause some companies to fall short of analysts' estimates.

"I think the big picture is that it's going to be very good earnings, but they'll probably miss a lot of consensus estimates," said Chris Mancini, co-portfolio manager of the Gabelli Gold Fund.

He emphasized that investors should assess the industry's underlying financial performance rather than focus exclusively on whether individual companies meet market expectations. In his assessment, producers can remain highly profitable even when rising expenses affect reported results.

"I think that the big picture, if you take a big step back, is that they're still going to be generating lots of free cash flow and reporting really good earnings," Mancini said.

Diesel prices are increasing production costs, but Mancini identified labor as an even greater financial pressure. He attributed part of the increase to development activity as mining companies advance projects and expand capacity to capitalize on gold prices approaching $4,000 an ounce.

"At $5,000 an ounce gold, they should be building projects. At $4,000, they should be building projects," Mancini said.

Despite the investment push, he sees greater financial discipline than during the previous gold bull market in the early 2010s. At that time, companies faced pressure to increase production and frequently pursued expensive, technically challenging developments regardless of their economic viability.

"The companies haven't yet gone to trying to build these really extravagant, high-cost, high-capital projects," Mancini said.

He expects the industry's current approach to keep project expenses more manageable than in the previous cycle. Smaller capital commitments and stronger financial positions have helped producers maintain cash generation while expanding operations.

"So the costs should be more contained this time around than they were last time," Mancini said.

Nevertheless, mining equities have struggled to attract investors outside the gold sector. Mancini described sentiment among mining executives and specialist gold investors at a recent conference in Denver as generally positive, but said broader market participation remained limited.

"These stocks are really cheap, but there still wasn't any interest, I don't think, from generalists," Mancini said.

He attributed the reluctance partly to concerns that elevated gold prices might not last, reflecting previous cycles in which sharp advances were followed by extended downturns. A sustained gold rally could help rebuild investor confidence, but Mancini also argued that companies should reconsider how they distribute capital to shareholders.

Many producers have used strong cash flows to repurchase shares. Mancini believes larger dividends could make mining equities more attractive to investors who have traditionally overlooked the industry.

"I don't think the market pays attention to buybacks. I think the market will pay attention to dividends," Mancini said.

He cited Newmont as an example, estimating that the company, with a market capitalization of roughly $120 billion, could repurchase approximately $8 billion in shares this year while paying about $1 billion in dividends. Together, those distributions would represent roughly 8% of its market capitalization, although investors evaluating dividend yield alone would see a much smaller return.

Mancini argued that redirecting more capital toward dividends could make the sector's returns easier for investors to recognize. Unlike physical gold, which does not generate income, mining shares can offer shareholders direct cash distributions.

"If they were to see an 8% dividend yield, they'd be like, wait a second, what's going on here? That's a big dividend. That's a big yield," Mancini said.

The timing of gold's next advance remains uncertain. Mancini pointed to the labor market as a potential trigger, suggesting that a substantial deterioration in employment could prompt investors to anticipate a shift in Federal Reserve policy.

He said a U.S. employment report showing a loss of 100,000 jobs in October, scheduled for release in early November, could trigger a sharp increase in gold prices as investors reassess the economic outlook.