"There's going to be significant rationalizing in the gold industry. You can't keep mines producing if they're losing money. Gold Fields South Deep mine in South Africa is one of the few mines that could survive at the current gold price of 1,230 an ounce. The mine's size [57 million ounces of gold at 3 kilometers and deeper] and the fact that it's largely mechanized, meaning it's less reliant on labor demanding pay rises, will help keep costs low."
"Bullion must rise to $1500 an ounce for the gold mining industry to be sustainable. The industry is not sustainable at $1230 an ounce, which is where the gold price is at the moment [now falling through $1200]. We're going to need at least $1500 an ounce to sustain this industry in any reasonable form."
- Demand/supply numbers will prevent this from happening as it implies a huge shrinkage in both;
- The price fall has been entirely a US sales phenomenon, which is finite. Either the US will remain out of the market going forward, or it will have to add to the demand figures we have described above.