Gold Prices To reach 2000 US$ per Troy Ounce in 2014
Gold has its worst year of 2013 compared to last the decade. A simple theory is how fast it came down, the same speed it will go up. By ignoring this face, by looking at the production cost statistics from gold miners, it ranges around 1250 US$ per troy ounce. If Gold prices falls below 1200 and stays for a while, miners will suffer a great loss which in turn will reduce their production capacity. When production capacity goes down, there will be strong supply shortage of gold. Since there is strong physical and investment demand for Gold in the entire world, supply shortage will push up the price like anything which I could anticipate Gold price can reach easily 2000 US$ by end of this year in 2014.
Jan 31, 2014 Gold futures trading around 1242. Here is the Gold Futures charts for the last 20 years.
Data Source: http://www.gold.org
As per the Production Cost reported by the company earning in the early last year (2013), production cost surging well above 1000 US$ per troy ounce.
Barrick Gold: $919.00
Newmont: $1086.00
AngloGold Ashanti: $1147.00
Gold Fields: $1291.00
Kinross Gold: $1038.00
Goldcorp: $1135.00
Yamana Gold: $856.00
Eldorado Gold: $1010.00
iamgold: $1403.00
Gold Futures currently trading around $1250, whereas the top three gold miners can produce Gold around 1100. Some miners like iamgold and Gold Fields are producing gold costing more than $1250 per troy ounce, they keep losing money and they have to reduce the production cost otherwise lower the production capacity.
Since Gold production cost increasing every month, the top miners may lose money if the gold price stays around $1250.00. This lower gold price will force the miners to lower the production at one point will suddenly create supply shortage, that will trigger the gold price like anything. The market will get complete fear at one point and that will take the Gold Price well above $ 2000.00 per Troy Ounce. There is no surprise if the Gold price reaching $ 2000.00 by end of this year 2014.