Consumers and investors had better be prepared to pay more for gold, with the industry struggling to make money at US$1,300

Consumers and investors had better be prepared to pay more for gold, with the industry struggling to make money at US$1,300. This is one of the major factors in our view supporting the price of gold and why gold prices are unlikely to collapse. And it's a view that's been lent support by Dr Mark Bristow, CEO of Randgold Resources. He commented to journalists at a media lunch in South Africa this week that the gold mining industry was fundamentally broke at a gold price of $1,300/oz and that the industry was unable to generate sufficient returns. The major factor is grade - the average grade of the industry had dropped from 2.6 g/t to just over 1 g/t over the past decade, which meant double the number of tons had to be mined to produce the same amount of gold, which was why costs had risen.