Morning HLL and allFriday's gold trading in the US was...

Morning HLL and all

Friday's gold trading in the US was astonishing to say the least. It certainly bought out the conspiracy theories regarding JP and COMEX reserves dropping to lowest levels in a decade and the rumors of 500 tonnes dumped, some of which naked short sold.

Obviously there is more to this than anyone here can explain with accuracy.

I think the well positioned junior explorers will shake this off as long as they have solid balance sheets as I expect a rebound to $1,600+ before year's end. Many of these explorers are year's away from production and as long as they have the cash reserves, will still be focused on proving up attractive JORC's for when POG rebounds. Most of them are trading at lows already (MAR for example), yet have forecast relatively low production costs for when they get going.

Personally, I think we will see an overreaction to some mid to large cap producers today that will offer a nice bounce trade. Plenty of low cost producers still make great margins even at these levels and even those with higher costs that have their hedging right.

So for the producers, I think it will come down to looking at their production cost, hedging and annual output.