Read the story here. Advertise at Before It's News here.
Profile image
By ProactiveInvestors (Reporter)
Contributor profile | More stories
Story Views
Last hour:
Last 24 hours:

Gold: pricing itself out of the market?

% of readers think this story is Fact. Add your two cents.

Despite a slight recovery evident today, the copious blood-letting of the last few days has many asking what lies ahead for gold? Ultimately, the exponential increase in the cost of getting the yellow metal out of the ground is likely to be the deciding factor, according to industry observer Mickey Fulp. 

Fulp, known in some quarters as the mercenary geologist, points to such galloping expenses as the inflationary price of labour and the skyrocketing cost of supplies and equipment as being key factors in the expenditure increases that will ultimately render much of the gold being mined today uneconomical under the market’s newer numbers. It is this refiguring that will return stability, he says. 

Gold futures bounced back slightly today with June gold rising $26.30 an ounce to close at $1,387.40 on the Comex division of the New York Mercantile Exchange, after shedding more than $140 an ounce on Monday.

“The average all-in cost for 2012 was US$1200 per ounce,” says Fulp “so at US$1400 that means that 50 per cent of the miners in the world are losing money. If the price maintains in the $1400 range you’re going to see numerous shutdowns by the end of the year. The quartile of miners with the highest costs is going to shut down, maybe even the highest half.”

“We will go into a cycle where gold companies start to downsize, tighten their belts and start to become profitable again. What’s propped this up so far is high metal prices.”

High metals prices are very much front of mind even beyond gold’s recent rout. While the precious metal was stealing the spotlight yesterday, at one point hitting US$1,355 per ounce, its lowest depth for two years, silver also suffered a massive slide to emerge with the dubious honour of enduring the biggest percentage decline of the day in key metals futures.

On the day that saw gold futures endure their deepest one day decline in decades, the yellow metal’s often overshadowed sister commodity was also experiencing a red letter day for all the wrong reasons, joining gold in a two-year low as silver futures dropped to close at $23.36 on the Comex, the first time the metal has closed below $24 since late 2010.

As panic selling took the sheen off the precious metals, silver, which opened at $26.05, fell as far as $22.92 on Monday, a far cry from the 52 week high of $35.20. On Tuesday, silver for May delivery recovered some to close up by 27 cents, or 1.1%, to $23.63 an ounce. 

The dip in silver’s fortunes may have been tied to the lacklustre economic growth posted by China, also cited as a contributory factor for the run on gold but more integrally connected to silver, as the disappointing figures indicated a drop in demand for industrial commodities.

Monday’s closing price for floor trading for May silver took an 11 per cent dive to $23.36 an ounce, compounding the damage done on Friday when Comex prices for silver dropped 4.9 per cent.

Story by ProactiveInvestors


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!

Order by Phone at 888-809-8385 or online at M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at M - F 9am to 5pm EST

Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen! 
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover -  Reduces Smart Meter radiation by 96%!  (See Video)

Report abuse


    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    Load more ...




    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.