PI Financial mining analyst Christos Doulis says six years ago when the financial crisis was in full swing, safe-haven buying made gold skyrocket. Today, the fear component is down, as is the price of gold.
Christos Doulis travels the world for Stonecap Securities looking for mining companies that can contain costs; companies that can't contain costs because of rising labor and energy bills are not profiting from higher gold prices.
There are gold companies that managed their balance sheets wisely and there are those that burned through cash and are left begging for financing. It's a great time for those flush companies that don't need handouts.
Spot market gold prices hovered just below $1,720 an ounce Thursday morning in London – 2.4% up on last week's close – while stocks recovered some ground and the dollar ticked higher as central banks in the UK and Europe left monetary policy unchanged.
With potash prices spiking higher in response to surging global foods costs, the world's most advanced "independent" potash project is in the cross-hairs of an increasing number of deep-pocketed suitors.
Increases in demand from China and India have driven a 7.5% increase in demand for gold jewelry during the first half of the year despite a 25% increase in the price. However, much of India's potential gold demand remains untapped.