Gold prices continue to hover just over $1300.00 spot this morning. We continue to advise clients that this cycle may continue well into 2014.
It is reported that it costs somewhere in the neighborhood of $1200.00 for seventy-five percent of the gold mines to produce an ounce of gold. The remaining twenty-five percent are said to be around the $800.00 mark but these are typically the larger mines with access to more concentrated gold.
The Fed and its banker allies have to be very careful as they suppress gold prices not to drive them below production costs for any length of time. If mines begin shutting down due to loss of revenue, gold production will slow in turn creating greater demand for the gold that is available. This will force prices to move higher regardless of Fed actions.
While we cannot know the day or hour, we know that eventually true math proves itself and we will see sustained corrections in gold and silver. They are both long term insurance against currency inflation and possible economic defaults.