With gold slightly under the $1200 level several analysts are predicting this to be the potential bottom for the yellow metal. Corrections in gold are not an unusual, back in the 1970s gold suffered a 50% drop, from $200 down to $100 before then bouncing back to record highs that peaked to $850 in 1980. Bullion hasn’t suffered a 50% correction and the mining community believes gold moving down much from here would be out of the norm. The average mining costs for the majority of mines to mine an ounce of gold are around $1180. Many people feel that gold can’t trade at this level for long as the mining costs will continue to escalate due to greater difficulty extracting ore, labor unrest, and regulatory challenges in the mining industry.
Avi Gilburt of MarketWatch is cautiously bullish on gold. “They do not often get it right about the metals on MarketWatch, but have seen too many Bearish articles calling for the death of the metals, so I felt compelled to speak up,” he commented. “While many are now saying it is time to sell metals, I will have to disagree. The time to sell your metals was several years ago. Now is the time to start looking to buy them back.” If the market goes lower, “it will likely be a buying opportunity and not a selling opportunity,” he advised.
He warns sellers, “may miss one of the most bullish market moves which can be seen in the next 10 to 15 years.”