Gold bugs, economists and central banks all have different views on where gold is heading, but just because it is down from late 2012 highs doesn't mean it isn't being accumulated. The frothy rise we saw thanks to the GFC may not be repeated, but long-term gold investors may like it that way.
China became the world's number one importer of gold last year as the Indian government's restrictions on imported gold bit down on what may have been a record year for its country's importation of the yellow metal.
There was even suspicion that the Chinese central bank may have been quietly picking up more gold when a spread between import data had gold market watchers scratching their heads about how to account for the difference.
Newcrest Mining Limited (ASX: NCM) was able to turn around its situation by cutting costs and concentrating on higher grade gold ore to get its production costs down. Now, when compared to other major international miners, it has the second lowest all-in sustaining costs for the year ending December 2013, after Barrick Gold Inc (NYSE: ABX), but less than five others like Goldcorp Inc (TSE: G) and Newmont Mining Corporation (NYSE: NEM).
It increased gold production in H1 2014 by 27%, so with higher volumes and a better spread between cost and realised sale prices, the possibility for better earnings is promising.
This week Alacer Gold Corp (ASX: AQG) presented at the BMO Global Metals & Mining Conference, showing that its all-in sustaining cost of US$865/oz in 2013 was at the low end of the global cost curve for its Copler mine in Turkey.
For 2014 guidance, the company expects the mine to produce 160,000-180,000 oz of gold attributable to the member equity holders apart from the 20% non-controlling interest in the mine, and all-in costs should be around US$730-$780/oz. That low cost will be great compared to gold's current price of about US$1,340/oz.
Foolish takeaway
Knowing gold miners and their individual situation is essential to understanding how they perform. A rising gold price is like a tide rising all boats, but you want the company with the strongest financial statements and best growth model.
