Gold falling last night was not that surprising when looking at...

Gold falling last night was not that surprising when looking at the recent prices of the producers. The HUI attempted rally last week failed to materialise. NCM yesterday closed marginally lower than its late June low when gold made that $1200 (closing price) low. ABU is also back down to its late June closing low at 2.3. HUI is holding around 5% above its June low. Gold is now $40 above that $1200 closing price low. Good luck guessing whether it retests the low, bounces before reaching it to make a higher low or makes a lower low. Its times like this that I’m glad I’m not in producers that are currently running at a loss. If this weak POG continues for a few more months ($1200-1300), some more mines are going to close down and more will scale down production further. Even with the producers currently running at a loss, the question now is; are we at or very near another major low point?

Meanwhile ABU has shown its small scale trial mine is not just cash flow positive but that it will also pay back most if not all of its capex from the processing of only 10,000t of ore. That is extraordinary but so are grades of 15g/t on surface. It would be good if the market could focus on that rather than the current weak POG.