|By Arabian Post Staff| The price of gold futures hit their lowest levels since October 2009, below what Goldman called a crucial level and at current prices half of the gold coming from mines may not be viable, industry sources warned.
“The more we continue to produce unprofitable gold, the more pressure we put on the gold price,” said Randgold Resources Ltd. Chief Executive Officer Mark Bristow. “In the medium term, it’s a very bullish outlook for the gold industry. The question is, how long are we going to supply it with unprofitable gold?”
Gold fell to a five-year low on Friday as a rising dollar and speculation that U.S. policy makers will boost interest rates next month curbed the appeal of bullion as a store of value. While industrial metal producers have promised output cuts, “we don’t have that psyche in the gold industry, we just send it off our mine and somebody buys it,” Bristow said in an interview in Toronto.
“The industry has moved away from looking at optimal life of mines because everyone is trying to demonstrate short-term delivery,” he said. “Where is all this value that people promised in the gold industry? It’s not there.”
Traditionally, the industry would address this through “survival consolidation and mergers,” Bristow said.
He said earlier this month that Randgold continues to look for projects to buy, but has been frustrated by companies excessively pricing assets.
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