(Article updated with gold prices information and additional commentary.)HOLLYWOOD, Fla. ( TheStreet ) -- Unrest in the Middle East and North Africa is hurting gold miners as oil prices pop. On the one hand, recent violence in Libya has helped gold reclaim its identity as a safe-haven asset, pushing the metal up to a record close of $1,431.20 an ounce Tuesday. High gold prices can keep miners rolling in dough as low cash costs mean high profit margins. But the biggest roadblock gold companies are confronting now is higher oil prices, which can eat into these profits. Oil topped $100 a barrel Tuesday and was trading above that level today, while Brent crude touched $116 on Tuesday. Gold mining CEOs attending the BMO Capital Markets Global Metals & Mining conference here Monday and Tuesday were unanimous in putting oil at the top of their risk lists.
Jeff Pontius, CEO of International Tower Hill ( THM), a Canadian miner with a 10 million ounce gold deposit in Alaska, says "we do see inflation in a number of places, fuel, of course, is always a big deal." International Tower Hill will start producing in 2016. The company will complete its pre-feasibility study in 2011. To try to combat skyrocketing oil, International Tower Hill is buying its own fuel and then supplying it to the drillers to make sure they aren't overpaying. "Typically if
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