This recent gold price weakness seems to be at least partly about Euro weakness and dollar strength with strength of the dollar hurting sentiment for gold; While POG has been weakening in dollars it was actually up last night in Euro and even touched a 2 month high. Unfortunately for our producers gold is at a 2 month low and closer to its 12 month lows than its highs in AUD at around 1350. AUD jumped last night as Euro rates were dropped. Just as well SLR acted very quickly to downsize and cut costs fast especially by putting Murchison on C&M. The CR and paying off debt has helped the balance sheet. They should be able to ride out this cycle of weak prices. However I lightened off yesterday when gold failed to bounce and sold the last bit on today’s open for a marginal loss. I’d rather wait and see what gold does from here. Not holding any other current producers. While the new SLR should handle this, many Aussie producers had negative cash flows in 2013/14 and haven’t reduced costs as much as SLR and current AUD POG is now probably lower than last years ave price. I don’t know how long POG can remain at levels low enough to ensure there is no significant new investment in gold mines. We should also see a cut in production this year. It can’t last forever but that doesn’t mean it can’t last for a while still.
Edit; not holding and sentiment to none for now (or long term buy).
