| Having fallen to $1,160 an ounce, a four-year low, the yellow metal stares at a bear phase in the medium term. But the World Gold Council (WGC) maintains that the current price level is unsustainable due to higher cost of production for the metal. It also says the US interest rate trajectory will not be the key driver of gold price.
The average all-in cost of production of gold stands at $1,350 an ounce as per GFMS-Thomson Reuters, WGC said in a report. The sharp drop in price may lead to a contraction in gold mining over the next few years. “While gold prices can fall below production cost for various reasons, prices below this level are not sustainable for an extended period, unless there is a widespread reduction in production cost or readily available new deposits are found. Both are unlikely,” the market development organisation for the gold industry said...............................................Full Article: Source
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