Spot gold stoppage

Gold’s spot price is likely to remain between $US1200 to $US1300 an ounce for as long as two years after rising more than four-fold between 2005 and September 2011, Mike Edwards, chief executive officer of gold explorer Monteray Mining Group, says.

“For a year or two I see gold around $US1300,” Edwards told Markets Spectator.

“Gold has had a good run. Producers have to deal with [the current price]."

Bullion’s spot price rose from $US412.70 an ounce on February 8 2005 to $US1900.23 on September 5, 2011, according to Bloomberg data. The price has since fallen 32%.

At 0817 AEST gold was at $US1287.45 an ounce. Spot gold is up 4.3% this month.

Gold miners in the current environment need to keep their all-in costs no higher than $US800 an ounce, says Edwards, with yields from mining and processing at four grams a tonne.

“Gold stock values need to come up before gold rallies,” he says (see Clifford Bennett's The aggressive play is gold).