The low price of gold caused a crisis in gold mining. The price will rise!
The last three years gold mining companies in most cases bear losses. This is due to the low price of gold that, in turn, leads to a significant loss of income. If prices continue to decline, some companies will have to suspend their production, because the low price of gold and the high labour cost will lead to a lack of profit and the unprofitability of production.
Is it profitable at the cost of production in $1,245 to have the price of gold of $1,100?
It is true that some of the companies reduce their costs, allowing them to stay afloat. There is even a whole program on this issue, introduced in 2013. However, some companies only pretend to enjoy this program, catering to their shareholders. The key point of the program is the reduction of staff and production costs.
For example, Rand Refinery in South Africa is going to cut 900 staff members, and another 300 will change their posts. The reduction of staff and costs are also planned in Harmony Gold from South Africa, and Iamgold from Canada.
In turn, the giant companies have more chances for maneuver, especially those which have old gold mines. The cost level for the production of one ounce of Barrick Gold is much lower: $ 200 - 400 less than in other companies, though the company's income is not very significant with the current price of gold. Another leading company, Kinross Gold, also said that is not afraid of challenges and difficult decisions, it is waiting for new projects.
In general, the majority of gold deposits still struggling for their survival. The current situation in the gold mining industry is like this: the longer the gold price will be lower, the more bankrupts will be in the gold mining industry. This is the inevitable road to the deficit of gold, and the number of proposals will not be able to satisfy all the demand. The logical continuation of this cycle will be the increase in the price of gold.
The clients of the Emgoldex company benefit from the situation in the gold market, they buy gold bars in the online store of the company at a profitable price of gold, which helps them to preserve and increase their savings, as well as Emgoldex allows to conduct their own business from every point in the world and become financially prosperous.
Share this useful information with your friends in social networks. Let them also have the opportunity to change their life for the better!
Category: Gold news Publication date: 2014-11-20 15:32
|Gold Fixing | Price History|