Goldcorp Inc. (USA) (GG), Newmont Mining Corp (NEM): $1,200 Is an Important Price for Gold Miners

Industry ramifications
So far this year, gold has fallen below the $1200 level, but seems to be rebounding strongly. While Fools are not typically technical traders, evaluating commodities without an eye for these indicators ignores an important factor. Along these lines, there appears to be some resistance around $1400 that you should watch carefully. If gold prices can break above $1400 and sustain this level, that will be good news for the gold miners. Newmont Mining Corp (NYSE:NEM) will be more likely to take on longer-term projects that are not viable at lower prices, but it will need to exercise caution unless prices climb significantly higher.

Gold Price in U.S. Dollars data by YCharts

You should also watch to see if some of Goldcorp Inc. (USA) (NYSE:GG)’s higher-cost projects are still able to drive down costs, even if prices climb, as it will signal that management’s call for discipline applies to all types of environments. If gold cannot break $1400, it may remain range bound, but any extended dip below $1200 should be considered very bearish for miners.

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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