Gold price and costs are moving targets and they are related. When I worked in the nickel mining some 20 odd years ago, we made profits at 2.50 $ per pound of nickel and some 15 years ago we made money at 70 cents a pound of copper. These days you need at least 3 times these prices to break even. Gold costs have also increased and now the mining and processing costs of gold average about 600 $ per troy ounce, while 15 years ago you could buy gold at below 400 $/ounce.

Costs have gone up because grades are getting lower, fuel is up as well as everything else, and in particular taxes and fees. So it is great that gold is up, but unfortunately profits of gold miners are not up that much, and the share prices have not sky rocket as they should.

Personally I think that gold will continue to go up, and there is no investment that has done better for the last 15 years running(cumulative for the last 15 years, last 14 , last 13 etc.). Walmartization has killed profits in many types of businesses, with the small business man dissapearing, but no one can touch gold!

China is now the world largest gold miner due to the avaliable and cheap labour(this will drop as they complete this cycle in their evolution). And it is not suprising, they produce 40-50% of all world major metals as well as concrete. These things they can import as concentrates, but it is not the case for gold. For gold I would guestimate that of the total cost of production, probably 80 to 90% goes to the actual mining and not much for refining. This means that the costs will be at the location of where the ore happens to be found. So gold mining will continue to flurish as is and I see no worry about it dissapearing as many-many other industries have.