DislikedI've read somewhere that Barrick Gold spends $900 to produce one ounce. I think you are right CT that if the price drops to $1000 the mine will shut down and supply tightens. The 4hr looks like a dead cat bounce to me but I'm still leaning towards a rally after the employment news Friday. Where are the BULLS?Ignored
There are some miners with costs well above 1k but they will not shut down their mines immediately even if gold drops below 1k, they will keep mining for gold as long as they can cover operating costs because its very costly to shut down/restart mines. Also remember miners can hedge their output by selling futures, in fact this used to be the norm until gold prices skyrocketed in recent years and most miners did not manage to make a dime from it because they were hedged at lower prices. Now that prices are falling so quickly the fear is that this practice will come back as the "norm" again, producers unwinding their short hedges have been the only buyers in the gold market in recent months, this could turn very ugly if they stop doing that and instead start to sell to hedge their output again.
Large specs (managed money) have been reducing their longs but as a group they are still NET long so don't hope for a short squeeze, its not likely to happen.
"Where you want to be is always in control, never wishing, always trading.
