UNDER WATER
Many gold mining companies, which have been striving desperately to remain profitable at a gold price of $1 300/oz, realise now that there is nothing to stop gold falling below that level and, in doing so, make it even more difficult to keep head above water. Helpful to their cause were the comments of European Central Bank head Mario Draghi, who gave a firm thumbs up to central banks holding very tightly on to their gold at this time. There was no mistaking Draghi’s firm conviction that gold was a great reserve of safety for central banks as well as an important protection against the fluctuations of the US dollar in non-dollar countries. Given the fast pace at which China is continuing to import as much gold as it can, it clear concurs fully with Draghi’s viewpoint.
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