Is USD 1162 Gold Price Sustainable ?

Gold Prices crashed yesterday to around 1162 USD per troy ounce, which is approx 36.14 per gram. This the lowest since July 2010.

In an unexpected move, the Bank of Japan’s policy board voted to expand the pace of its quantitative easing, sending Tokyo stocks surging and the yen sharply lower against the dollar. The central bank will increase the monetary base at an annual pace of 80 trillion yen per year, above its previous target of 60-70 trillion yen.

“The surprise policy move from Japan was a big driver getting markets overseas excited and it’s following through into the U.S.,” said Paul Zemsky, the New York- based head of multi-asset strategies at Voya Investment Management LLC, which oversees $213 billion. “It also makes people extrapolate, thinking maybe the ECB might be doing a little more now.”

This move from Bank of Japan, has made yen depreciating yesterday towards the USD. And having the impact of Gold Price.

But is this price for gold sustainable in longer term, since many of the mining companies, are having Cash Cost above USD 1100 USD and All Sustainable cost is even higher ??

Annual Production of Gold 3000 Ton approx
Daily Gold Trading at Commex 1000 Ton or more approx

Question remains to answer in that case is whether the FRESH physical supply do really have an impact on gold price, since gold is much more on above the earth then under the earth. And it is non perishable and non consumable.

Gold and CAD - India

1. 95 Tonnes of Gold has been imported in India in September 2014.

2. Which was only 15-20 Tonnes in September 2013.

3. According to government data, gold imports were at USD 3.75 billion in September this year compared to USD 682.5 million in the same month last year.

4. This is resulting to High Current Account Deficit.

5. Gold is non-important item and former finance minister has advocated against lifting the curbs on gold imports.

6. Market insiders say increase in imports by star and premier trading houses was the main reason for the very high import bill. Silver imports have also increased, from 218 tonnes to 690 tonnes.

In my personal view, gold in pure form import shall be curbed, since it is non-essential item and India has to pay for this in USD.