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Gold is a commodity and the supply is somewhat elastic. When the price goes up, gold mines open. When the price goes down, gold mines close. I have friends in Alaska with a placer claim that, under normal circumstances, they work as a family claim in the summer only. Now that gold is over $1900/oz, they have hired 20 workers, refurbished the bunkhouses, and leased some heavy equipment. If people want gold, miners all over the world will fix them right up.
It's like any other commodity. If the price of oil goes up, companies will drill for oil. If the price of corn goes up, farmers will plant more corn. If you are going to hold gold, the time to buy it is when nobody wants gold.
What is their break even all-in cost for an ounce of gold? Though it’s debatable my view is the average across the industry is $1,200 an ounce and rising every year. Point being that that constitutes a “floor” for the price of gold.
What is their break even all-in cost for an ounce of gold? Though it’s debatable my view is the average across the industry is $1,200 an ounce and rising every year. Point being that that constitutes a “floor” for the price of gold.
I don't think there is an industry-wide "break even" price for gold production. The higher the price the more mines open, but no matter how low the price goes, there will always be some production. Gold supply will always exceed demand because it is generally hoarded. Only small amounts are used in electronics for contacts, though you can still recover almost an ounce from old mainframes if you can find one that hasn't been recycled.
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