Gold in the midst of correction, says expert

Gold prices are poised for an upside once the markets get consolidated and will adjust for a higher price by the year-end, said Joseph M Foster, portfolio manager of Van ECK International, a feeder fund from AIG Equity Fund Gold.

He was speaking at the launch of the American International Group (AIG) Mutual Fund's open-ended gold fund on Monday.

"Our expectation is that gold would trade in the range of $850-950. For 6-12 months, we will be a phase of consolidation," he said.

The AIG World Gold Fund is aimed at providing long-term capital appreciation by investing 80-100 per cent of the corpus in the units of AIG PB Equity Fund Gold and/or other similar overseas mutual fund schemes and 0-20 per cent in debt and money market securities and in the units of debt/liquid schemes of domestic mutual funds.

The new fund offer of the gold fund would be open from April 15 to May 14 and would re-open for ongoing purchase/redemption on June 12.

"There seems to be more interest and liquidity coming into these gold mining stocks with increased interest in the gold shares," he said.