Gold-mining companies will feel pain if the price of the metal should fall below $1,000 an ounce stay there, analysts and fund managers said.
Production cuts are possible as a last resort, and there could be consolidation in the mining sector.
A number of investment banks have forecast gold could fall below $1,000 on higher U.S. interest rates, although most also look for a recovery. But what if prices don’t stabilize?
“Some companies will be OK,” said Dan Denbow, portfolio manager of the USAA Precious Metals and Minerals Fund. “Most companies – below $1,000 – would not because while they might be able to generate a margin on the gold ounce produced, they won’t cover their G&A (general and administrative expenses) and debt service.”
Going into 2015, companies collectively could generate cash flow in a range of $1,150 to $1,250, Denbow continued. Between $1,050 and $1,100, they would need to cut additional costs.
via Kitco 
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.