The bullish technical outlook for GDX could come to fruition, but gold futures will need to chip in with higher prices. In late September, Citigroup estimated that 98% of gold companies on are “cash-burning” at spot gold of $1,320 per ounce. [Analysts See More Pain for Gold Mining Stocks, ETFs]
“Gold companies have continued to cut capex, exploration, and corporate costs in order to make ends meet in a lower gold price environment,” wrote Citi analysts. “Despite these cuts, we estimate that most of the global gold cost curve is burning cash at spot levels.”
Market Vectors Gold Miners ETF
