NEW YORK (TheStreet) -- Gold prices had a disastrous 2013, but 2014 started off with the yellow metal up $20 per ounce and closing above the key $1,200 level. TheStreet's Joe Deaux spoke to Miguel Perez-Santalla, vice president of business development at BullionVault.
Some market argue jobless claims came in lower than expected, which may indicate a negative sign of things to come and prompting gold to rally on Thursday, Perez-Santalla said. However, he disagrees and thinks gold's move higher is because prices are cheap. Investors saw gold below $1,200 and decided to snatch it up while they could, he said.
Deaux asked the question many investors have likely been wondering: How long will the $1,200 level last as support?
According to Perez-Santalla, it should hold for "quite a long time." He said it costs miners roughly $1,100 per ounce to mine gold, meaning there is a reasonable $100 premium built into current gold prices. For this reason, he believes $1,200 will continue to hold as support.Although the Federal Reserve has begun tapering its asset purchasing program, there is still a sizable quantitative easing program instilled in the Fed's current monetary policy. Coupled with the uncertainties regarding the Affordable Care Act's effect on the U.S. economy, Perez-Santalla concluded that investors should continue to view gold as a "safe haven" asset. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell