Time to invest in Gold?

Trend: Gold and precious metals are gaining favor as the financial uncertainty increases and the dollar loses steam.

Jim Jubak at MSN Money (he's no goldbug) sees gold prices rising in the next few months. Excerpts below.

Link: Are we buying a $700 billion 'maybe'? - MSN Money.

Jubak writes:

Shares of gold mining companies took a beating this summer as the dollar unexpectedly rallied. Gold shares took a beating, and Kinross Gold (KGC) was no exception. Its shares fell 51% from July 14 through Sept. 9. The reversal in the past two weeks has been stunning. The shares climbed 46% from Sept. 9 through Sept. 24.

I think gold is likely to take a bit of time to consolidate its gains near the $900-an-ounce level, but continued global turmoil and the prospect that the U.S. Treasury will actually have to sell $700 billion in bonds are likely to keep gold and gold shares moving up over the next six months.

Wall Street analysts are busy raising their estimates for gold prices. On Sept. 23, for example, UBS (UBS) raised its November target for gold to $925 an ounce from $850 and its three-month target to $975 from $900. Gold closed at $888.50 an ounce on Sept. 23.

Kinross projects production will climb to 2.5 million ounces in 2009 from 2 million this year. That, plus an increase in the price of gold, should make the next year better than the last for Kinross shares. As of Sept. 23, I'm raising my target price slightly to $26 a share by July 2009 from the prior $25 a share by September 2008. (Full disclosure: I own shares of Kinross Gold in my personal portfolio.)