I hear this over and over again that the price of gold/silver can't go much lower because we're at about break-even for production. This is a silly statement. Of course prices CAN go lower, it will just make the more expensive mines unprofitable and eventually put them out of business. The same is true of oil. If all had said the price of oil couldnt drop below the production cost inclusive of all of the shale extraction, then it wouldn't have gone lower. But it did, and it is putting stress on shale. Eventually we'll see a bottom, but when enough of the high-cost producers have been destroyed.
Of course it could go lower than the recent lows of around 1,170$ an ounce (or even below 1,140$ as of March). But this won't be for long. It is not actually about the production costs of gold mining (though they do contribute). All gold mines produce annually only a few percentages of all gold that is stashed and hoarded since ancient times. Obviously, you forget to take into account the other side of the equation, that is, demand for gold. Personally, I want gold to go below its current price level, so that I would buy it cheaper. And you may well guess that I'm not the only one...
