~*~Mining and Metals Du Jour~*~

[goforthebet]

So the oil shock and credit contagion as well as the currency war that we’ve talked about are all contributing to the positive action in gold. $1,260 is a level that I am watching because if gold can break above that level before Christmas, my anticipation is that we will start to see moves of more than $100 in the price of gold.

Also, the beneficial aspect of the lower oil price for the gold industry is enormous. Oil is the number one input cost in the mining sector and the price has collapsed. The latest quarterly earnings from the mining sector showed a lot of them got their ‘all-in’ costs under control. Well, the major part of those costs are energy related.

What is now happening is the crash in oil prices is going to have a tremendously beneficial impact on some of these gold producers. Even for those who have hedged oil costs, they will still see the positive impact in 2015. Regardless, this will be a huge savings for the gold industry.

For example, Barrick Gold spent something like $1.5 billion for energy alone last year. Well, in 2010 that number was around $1 billion. So the lower energy costs will amount to a massive savings for the producers across the board. This is something that the mining industry has not talked about but we will start seeing the positive impact of this in the first quarter. This bodes extremely well for the mining sector, which has already been tightening their belts. So this could not come at a better time for the producers.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/15_Legend_Says_Despite_Recent_Weakness,_Gold_Price_Set_To_Soar.html