10 Percent of Gold Mines No Longer Economical

Mining Weekly reported that falling gold prices mean that one in ten gold prices are no longer economical. The article cited a Wood Mackenzie reported which suggested that current price levels “put approximately 10 per cent of gold miners in loss-making territory on a Total Cash Cost plus Sustaining Capex (TCPS) basis.”
As quoted in the publication:

Overnight gold dropped to its lowest point in five years, marking the tenth straight day of losses and the worst period of depreciation since 1996.
The price fell down to US$1087.10 per ounce last night, prompting many analysts to state that the metal has lost its lustre.
“We believe gold has lost its safe haven bid. It has instead become primarily a source of cash in hard times,” Robert P. Ryan, from the Bank Credit Analyst of Montreal, told Bloomberg.
This is due to the shorting of gold and news from the US Federal Reserve that the Central Bank will raise interest rates in the country before the year is out; the first time it has done so since 2006.
This in turn heightens the likelihood of people holding gold as the metal is providing little to no yield, causing a price decline.

Click here to read the full article from Mining Weekly.