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Gold Drops Below Its Average Cash Cost
As shown two months ago, the marginal cost of production of gold (90% percentile) in 2013 was estimated at $1300 including capex. Which means that as of a few days ago, gold is now trading well below not only the cash cost, but is rapidly approaching the marginal cash cost of $1104...
Which means that of the following mines (as we showed here) which make up the gold cost curve, one by one, starting on the right and going left, production is going to go dark, even without the recent demand by South African gold miner labor unions to have their wages doubled. Until eventually virtually no gold will be produced.
It is at that point where one must apply the New Normal supply and demand curve, when one can predict a $0 per ounce price for gold, as physical demand continues unabated, while actual physical, not paper, production has now started going offline.
Joking aside, not even Bernanke and all the paper Gold ETFs in the world will be able to do much to suppress gold prices from reaching their fair value when gold production hits a standstill, and when demands, especially by China, is still in the hundreds of tons each year.
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However you own gold just make sure the physical is there. Remember that gold confiscation is very unlikely, not enough people own it. And if they ever announce confiscation, they admit that it's valuable, which they can't do.
The game is to drive the price down to free up the available physical supply from whoever is dumb enough to sell. The banks can then go net long.
They basically decided to just pull the plug now. What we are seeing now will never be repeated, this is your last chance. It's interesting to watch this unfold in our time.
Bullish for above ground gold!
A couple of warm gold Eagles in one hand, a good glass in the other hand, both eyes full of a beautiful naked woman in the sunlight. Ahhhhhhh.......
Why is there an advertisement on the right side of the screen selling something about gold going to $750????
Its going to infinity, and beyond....
Just off the phone with Frau Merkel. She says that the US can now speed up the delivery of ze gold please. She wants to have it quicker and sell it before prices go down to nothing. I completely understood what she meant.
Perhaps a bit off-topic but I wonder if there is a genetic impulse towards self-preservation.What I mean is I keep feeling very bad about wasting food these days (Squirrel complex?). When I scrape the plates after supper I feel like someday I might think back fondly on these days of plenty.It is partly from watching the country implode since 2008,but I keep thinking that most families don't have six months or a year of food stored (Families that are not living in Utah).
Not many kids open a history book these days but there will be a lot of pissed off people when they realize we have been screwed TWICE now. Once after the 1929 crash and once again in 2008. There is an apocryphal story about Napolean.One of his Generals is asking to delay an attack. Napolean responds,"Ask of me anything but time".
i'd rather not eat 9 month old food if i didn't have to.
I'd rather eat than not
if it's properly canned, preserved, dried, why not?
always running for fresh food based on an importation & oil (refrigerator truck) delivery system is flat out unsustainable.
squirrel is my spirit animal, maybe yours too?
I can not find any place that sells canned squirrel.
Gold takes more Fiats to produce than the number of those same Fiats it can be sold for?
Time for war on Goldbackistan!
It's in our interrorists.
I found out that the reason gold has dropped is because the extreamly hot weather in Alaska and Canada has flooded the streams that have gold, and now there is going to be a huge amount of gold nuggets all up and down the streams and rivers.
It seems the price of physical gold and silver is not as important as the price of paper, which can certainly drop below the cost of mining the metals. The assholes manipulating the world's markets could care less how much damage they do as long as they come out on top.
USGS estimates 17 billion oz ag left in earths crust - 1 billion oz mined annualy
Due to small and diffuse nature of silver in earths crust, only bout 1/3 can be economically mined at anything near these prices...meaning we have bout 5yrs of production left at ever lower ore grade, ever higher demand, ever higher input costs (oil, labor, environmental)...
Primary mining of silver is as a byproduct of copper, lead, zinc mines...these mines have overcapacity as China demand for a once in a nations history building boom that is just wrapping up...much marginal silver production will go by by as base metal overcapacity is corrected.
So, how is this not exactly fucking opposite US, UK, Jap, EU fiats that will be printed to infinity????????????????????? Hang tight and be right my brothers...if gold / silver don't go up in price it will be because we no longer have a market and rather a global command economy - let's hope that's not what we are headed for.
BTW - silver was capped at $18.50 for 9 months overhead resistance (monthly) before it finally broke out...in next 9 months went from $18.50 to $49 and then 27 months to get back...we today touched $18.50 from whence all this started...I have a feeling given horrible sentiment, short covering potential, below ever rising cost of mining, and complete retrace we saw the bottom today. Add in that CB's are now moving to take back control global of yields or lose the deflationary war...n I've been wrong before but I'm thinking we will go no lower.
USGS estimates 17 billion oz ag left in earths crust - 1 billion oz mined annualy
That's 2,5 oz per world capita left, and 1/7 oz per person per year, if you pretend that the industry stopped using Ag today. Of course, the population is still growing, as is the industrial need too.
OT
Tyler
My computer has a damaged disk and am unable to install the newest OS on it so went to repair the disk and did a check on permissions out of curiosity and this came back; Open error 5: " Input/Output error" on Applications/Safari.app/contents/Resources/zh_TW.proj/SafariHelp/pgs/9252.html The part saying >>>>> zh_TW.proj has me stumped,perplexed and a bit freaked out can you explain any of this ??????? thanks prains
Don't freak, google is your friend.
https://code.google.com/p/nally/source/browse/trunk/zh_TW.proj?spec=svn75&r=75
http://community.wikidot.com/forum/t-571841/developer-language-project:zh-tw-for-full-website-translate
Thanks Ready
does this also explain all the Remotemanagement language profiles having permission errors on all my hardrives as well??
if interest rate soaring then end of fake inflation
Fake inflation? How so? Inflation is only moderated if you read .gov stats.
you trust that number ? good
http://www.shadowstats.com/alternate_data/inflation-charts
Gold has certainly dropped below my cost.
Featured Video
Closing Bell - May 22, 2013
http://www.grantspub.com/resources/video.cfm
Behold USLV ETF, trading at $4.78. Triple long silver..now the money changer creators of this won't allow it to go to zero now would they?
reverse split. it's only happened to UVXY about 1,000 times since its inception. Look at a multi year chart of that thing; exponential decay.
It is crazy, though. I traded USLV the day QEternity was announced last late summer/early fall, and it got up to 40ish.
26 June 2013
Gold Daily and Silver Weekly Chart - Staggering Into the End of Quarter
"I think we are nearing the end of the exercise in inventory adjustment and buying patterns that started in October.
While it most likely had its impetus in the official, in practical implementation it smells like asset stripping to me.
That is another term for a 'stealth confiscation' through price manipulation." ...jca
....
here the rest .."But why speculate. Let's see what happens.
Gold is still flowing from West to East. There is no doubt about that.
I just wonder how many of the Banks and their friends are using this opportunity to wet their beaks now, and even feather their own nests for the future.
Am I being too cynical? Are serious? What market haven't they rigged lately?" jca
.
http://jessescrossroadscafe.blogspot.com/2013/06/gold-daily-and-silver-w...
Queues back at major bullion dealer ABC in Sydney. Not as long as after the big plunge in April. But still a 40 minute wait to get served. Customers were Indian, Pakistani, Vietnamese, Chinese, Lebanese, Eastern European - no Anglo-Australians. All were buyers.
I tried to warn everybody! And the Gold Bugs just called me bad names and said hurtful things.
http://www.youtube.com/watch?v=lKs4JVIjTqQ
Squeeky Fromm, Girl Reporter
nice one squeeky
I gather your not welcome on TF metals . You don't understand it's not the value , really it is not the value. People like you are just sheeple it doesn't matter if the paper price goes to zero you just get more. PM stackin is not about money it is about preparing for the end of the world. It's about Mega-hyper-superdupper inflation. It's about paying off the border guards. It's about the relationship with your bullion dealer and only paying 13% commission. It's about the impending collapse.
Putting a price of $5000 by king world live or sprott or sinclair is not about price, they are saying that as guidance only. They don't care if it is valued at zero . The dollar will collapse.....one day. These guys have seen it all before when silver got to $50 and then collapsed this time is different. you just don't get it.
Learn to stack squeeky just learn to stack
Hi LickS!!!
Some people say that I am well stacked! LOL! But seriously, if I think the end of the world is coming, do I invest $10,000 in some yellow metal, or do I buy this:
1 acre of land in the woods $1,500
2 years worth of canned goods 2,500
A good shotgun 800
Some shotgun bullets 200
An AK47 1,000
Some AK47 Bullets 500
A used camper 2,000
Some solar panels 1,000
A guitar and some extra strings 500
________
Total $10,000
Now, water you can store up for about free, and you probably already have some stuff bought, like tools, fishing stuff, blankets, aspirin, cat litter and stuff like that. You may even already have your guns and stuff.
Sooo, to me that is a much better choice to make than some metal that will either get you killed by bandits, or will be worth mere pennies on the dollar.
Squeeky Fromm, Girl Reporter
Yes of course you obtain what you have listed. If you have spare excess fiat that will become worthless, gold is the only asset that you can store your wealth outside of the system (and come what may after the SHTF). Yes, when it really hits the fan we will have a different society to cope with, but any spare fiat aint gonna do you dick if no one has faith in it. I repeat, It is the only medium in which to store excess wealth, if you are lucky enough to have any excess. It is not an investment strategy!
I'd scratch the acre of land in the woods, unless it's at least 5 hours drive from any population center of 10,000 or more (range of a car). Because the crackhead armies are going to get the last petrol and running cars and send out gangs of riflemen to harvest food from the farms and cabins in the woods like yours. Having a good tribe of 150-200 people is going to be much better than a cabin in the woods and a tribe should be free.
And just supposing your spot were isolated enough, you don't really need to buy it, just need to hide there. Read about Heime Korth- he knows how to conceal a cabin is about the only person who's life isn't going to change.
If you skip buying the cabin you can pick up an ounce of that gold you detest and a few silver rounds. Just in case you're wrong about precious metals you might want to get some.
You really have not grasped it have you. Gold is a store of wealth that is alternative to the debt ponzi system. A place to put your 'soon to be worthless' Fiat. If you have excess fiat and have prepped with beans and have land and ammo what are you gonna do? Sit on a pile of cash? No, you would be rather silly to do that now wouldn't you. You exchange that shit for physical gold.
It is time to buy productive hard assets. Gold is THE only store of wealth. Has always been, and will always be.
At the moment there is no price discovery mechanism for gold and silver.
That will only appear when the sinister hand of the Fed and banks have stolen what they have wanted.
If these banks are in the process of going long on gold and silver then you would expect at some stage it will be in their interest to let the market run to its natural level.
How long do we have to wait until the sinster and corrupt powers decide they have enough.
Hmmm. No price discovery for Gold. OH WAIT! They do have IQ tests! I just bet there is an inverse relationship between IQ and gold purchases. The lower the IQ, the more money a person puts into gold; and the higher the IQ, the less money! I bet there is even exponents and stuff involved.
Squeeky Fromm, Girl Reporter
you're getting better
Interesting concept, "putting money into gold".
All my coins are already filled with gold though. How do you put more gold into the coin exactly?
Or perhaps you're referring to my toilet paper business? Yes, I have large amounts of toilet paper for sale every month. Lately I've been very lucky because the price of toilet paper has increased substantially and I get more money for the same amount of paper.
Unless you own it, physically - it's worthless.
Thanks Ann - I got out last year. ;)
Golds production cost is not REALLY $1200, or $1034.78. Plan for gold to be much lower shortly. Fully expect a 50% !! retracement from its all time high. ALL of the gold NEEDED in the world is available via recycling for much less than $1000/uSD/Oz. There are MANY times more sellers of gold than their are buyers even with the Chinese and Indians buying. VERY few people have the $$ to purchase physical gold for jewelry or stacking regardless if the price is $1900 or $800 or even $400 for that matter. Thankfully the other store of wealth in America , the house, will be collapsing in value shortly also, thereby offsetting the value of gold vs houses. Things won't be positive if you own either. The only saving grace will be the millions upon millions of people once again choosing not to pay their mortgage and they will, once again be able to afford to buy gold (or eat out every day) because they will be living rent free. Oh wait, we already have what 20 million of those people living here already?
I picked up 100 one oz silver rounds today for $21. My retard friend said that silver is going to $15. I said good then I can buy another 100 and if I pray it goes back to $12 again I am maxing every CC I have to back up the truck.
brave, crazy fucker...I wish you well.
Don't use debt to buy silver. When you use leverage you're playing their game. But guess what, they have access to unlimited credit. And they can withdraw paper supply, contracting the paper bubble, diminishing your earnings, making it harder for you to pay back.
In order to win we need steady, strong hands. Hands that can resist a temporary deflation and are never forced into selling PMs.
Have a few thoughts to share about the recent movements in the price of gold.
A read on Harvey Organ's post on his blog dated 26 June 2013 seem to be suggesting that the bullion banks are running out of inventory for delivery of physical metal. The question is then why do we see the price of gold falling despite strong physical demand.
- I would argue that the true spot price of gold should be the cash price payable for a reasonable amount of good delivery bars of gold, say about 5-10 tons, to be delivered over the counter. I have not seen anyone provide such a statistic yet, but if that exists, it would be a reasonable gauge of what we would consider as the true price of gold.
- Classical economics suggests to us that the lower the price of a given product along its supply curve, the lower the supply. This means that if the price of gold is currently below its true price, we should see demand outstripping its supply. This is what we are seeing now as reported by various sources on gold sellers taking longer to fill their orders and the long queues outside retail shops selling gold jewellery.
- The paper traded price of gold is ultimately anchored on the availability of the physical product being delivered upon demand. In other words, if the rational expectation to receive delivery upon demand is less than 100%, it would then be likely for the paper traded price to receive a discount from the true price. Therefore, if the market believes that there is no hope of receiving delivery, then the futures contract promising it is worth exactly ZERO. This is why buying physical and then shorting the same amount on the futures exchange is a winning trade because the cost basis of buying the physical would tend towards zero when the bullion banks fail to deliver!
It would be interesting to see how these 3 concepts align when the bullion banks finally run out of inventory.
Well, we'll, well,... The gold washout is here. Didn't think it would get this low but it has. My personal belief is to hang on tight... I remember reading, way back in 2009, that very few would make money in gold because there would be dramatic down drafts that scare everyone out. Well, stupidly enough I am holding on for text 3-5 years. Do I wish I had sold my stocks of miners back in oct? Hell yes. But I have never been much of a timer so I am holding for my original timeline. Next 6 mos should prove interesting.
SM
Truck has been backed, gate down, loading up!
I think now is a great time to buy. But seriously, most you goldbuggers. You loose credibility and sound incompetent when you consistently say, "buy buy buy," from $1900 all the way down to $1300 during a huge downtrend. The mere fact that you didn't foresee this drop shows that you don't know anything and/or blindly following an ideology.
Some folks get a bit crazy. I've bought all during. I just see it as savings. I don't wanna become rich or preach, I just want my money safe and growing at an earnest pace. I'm sure there are stocks that can do better...or worse, but I'm no trader. I have a daughter and family. I wanna pass on some wealth to her without creepy, greedy fuckers trying to grift it. Gold may go down or up, but I see little down side from here, but what do I know. If In 20 years its the same price wise so be it. It'd be the same in FRN form. I await the "Chartist" and/or smarmy day trader retort, post cocaine fix.
Much respect to you, IridiumRebel. Your daughter has a great dad.
Physical PM buyers (aka "goldbuggers") count their holdings in ounces, not dollars or any other fiat currency. What don't you get?
If you count your holdings in ounces, I don't get why you didn't time the market correctly in order to have more ounces in your holdings.
1000 pardons, Tradehunter, for most of us not having perfect precognition.
Hindsight is always 20/20.
Well, here's another observation about Gold Bugs from me:
Die Scheisskopfen
(Gold Bug Version)
A Poem Of Healing!
by Squeeky Fromm,
Girl Reporter
How oft I wish when I have heard
Some Gold Bug wax moronic,
That for the cranium they made
A cleansing High Colonic.
Perhaps some sort of nasal spray,
With laxative included?
To roto-rooter out their brains
And leave them less deluded.
Or maybe take a Neti Pot
With crevice tool extending?
And they could name it “Nutty Pot”
And seek a “Patent Pending.”
There surely has to be a way
To sanitize gray matter.
And flush out all that “store of wealth”
And other Gold Bug patter.
The Bi-polars and Borderlines
We treat throughout the Nation.
But did we under-rate the risks
From Mental Constipation?
And so to those with Poop for Brains,
Hold on, a cure’s a-borning!
Or better yet, just let it go!
But first, give us a warning!
Squeeky Fromm
Girl Reporter
best to you.
in a year or two my intention is to comment
on your "post" should there be such a thing
and opportunity.
best to you, and always protect yourself and
those you love.
Grateful Dead - Friend of The Devil
https://www.youtube.com/watch?v=XacvydVrhuI
So the answer is: How many call options, at what value and how far out does Mr. Durden own?
You can buy a 100 oz call for May 2017 at a strike price of $2400 for about $31.00 per oz. If gold were to go to 3K by then you could easily make 57K profit per contract.
How many oz was that Mr. Durden? If you are not telling us your status vs options we can safely conclude that you just produce planet warming hot air for the purposes of entertainment, and really have no idea what is going on or what is going to happen. Might as well read the astrology pages