How do you know it costs $400 to extract? Have you seen what happens to miners shares? do you really believe they would crash if their cost is $400 most companies disclose this information. there is no secret about that. It costs to extract gold in the range of $1100-1300 for most miners some of miners have production price above $1400 if gold goes below $1000 I will go all in as that means there will be virtually no new supply until price goes back to at least $1500
so... until 2011 miners have lost money doing their job ? nice, thanks, there's always something to learn
people need to understand that paper gold is nothing, phisical gold is money. Gold was not traded, paper gold was traded... who cares about paper...
who cares what was traded. Paper money buys you smoke, and other fun stuff. It is up time for gold till further notice.
That's a fallacy. The average production price is a variable, not a constant: it depends on gold demand. High/low demand equals high/low production price. If demand for gold collapsed then so would the average production price, because only mines with the lowest-cost production profiles would survive.
" because only mines with the lowest-cost production profiles would survive. " that is not quite the case. mines survive but may close down for a period of time. furthermore the gold production may be hedged at higher prices so production would still continue.
Sheesh.. this always happens. When "an analyst" on TV says something, do the opposite and you have more than 90% chance of winning. I've used this technique a few times myself.