As noted before in this article, production costs of mining gold are rising much faster than the price of gold. Previously we saw Kinross Gold having trouble getting their acquired asset from Redback Mining into construction/production due to rising capex and production costs. This time it's Barrick Gold who is stating the same.
The net earnings in Q3 2012 plunged in half from the previous year, making Barrick Gold's earnings P/E ratio go over 10. They revised twice their estimates of capex for their mine at Pascua-Lama, which is pretty unprofessional if you ask me. This tells me that costs of production are rising very rapidly.
In the case of Barrick Gold, the point is that production costs have risen to $592/ounce of gold in 2012, while it was $453/ounce of gold in 2011. That's an increase of 32% in just 1 year.
The gold price was $1600/ounce in 2011 and is $1730/ounce in 2012. That's only an increase of 8%.
This means that gold has to at least rise to $2100/ounce or in other words rise another 20% from this level to even match the inflation costs of production from mining the gold.
I expect that this rise in gold will indeed happen as mining will become more and more difficult at this rate.
Today New Gold will be releasing their earnings, I hope they do better as I have an interest in them...
- List of Correlations
- Gold Checklist
- Copper Checklist
- Gold Forecaster
- Oil Forecaster
- Stock Forecaster
- Bond Forecaster
- USD Forecaster
- Poo Forecaster
- Bitcoin Checklist
- Q Ratio
- Stock Valuation
- Leading/Coincident Indicator
- Misery Index
- Junk Bonds Vs. Stocks
- Currency Vs. Bonds
- Yield Curve Vs. Fed Funds Rate
- U.S. Bond Yields
- Dividend Yield Vs. Bond Yield
- QE Vs. Bond Yields
- Money Supply
- Dow Theory
- Excess Reserves
- Central Bank Balance Sheets
- Fed Balance Sheet Vs. Dow Jones
- Credit Spread Vs S&P
- Total credit Vs. Dow Jones
- Debt
- Debt Vs. Delinquency
- % Debt Held by Foreigners
- Interest Payment on Government Debt
- Disposable Income Vs. Housing
- Retail Sales Vs. Disposable Income
- Tax Revenue Vs. Stocks
- Tax Revenue Vs. Savings Rate
- NIIP Vs. Currency
- Trade Balance Vs. Currency
- Deficit
- Deficit to Outlay Ratio
- China Power Consumption Vs. China GDP
- Freight Vs. GDP
- Inventory Vs. GDP
- PCE Vs. GDP
- GDP Vs. Trade Balance
- GDP Vs. 10 Year Bond Yield
- GDP Vs. PMI
- Profits Vs. Employment
- Employment-Population Ratio Vs. Wages
- Employment-Population Ratio Vs. GDP per Capita
- Unemployment Vs. GDP
- Part-time Employment
- Productivity Vs. CPI
- Output Gap Vs. CPI
- Taylor Rule Rate Vs. Gold
- PPI/CPI/PCE
- Retail Sales Vs. CPI
- 2 Year Vs. LIBOR/SOFR Vs. Fed Funds Rate
- Loan Growth Vs. Fed Funds Rate
- Fed Funds Rate Vs. CPI
- Fed Funds Rate Vs. Unemployment
- Delinquencies Vs. Unemployment
- Delinquency Vs. Fed Funds Rate
- Labor Force Vs. Unemployment
- Non-Farm Payrolls Vs. Unemployment
- Quits Rate Vs. Wage Inflation
- Wage Inflation Vs. Unemployment
- Wage Inflation Vs. CPI
- M1 Vs. CPI
- Capacity Utilization Vs. CPI
- Capacity Utilization Vs. Unemployment
- New Homes Vs. Rents
- Lumber Vs. Housing
- Savings Vs. Housing
- Housing Starts Vs. Unemployment
- Initial Jobless Claims Vs. S&P
- Consumer Sentiment Vs. S&P
- Durable Goods Orders Vs. S&P
- Building Permit Vs. Housing
- Construction Vs. Housing
- Adjustable Mortgage Vs. Fed Funds Rate
- Fixed Mortgage Rates Vs. 30 Year Bond Yield
- MZM Vs. 10 Year Bond Yield
- Gold Vs. 10 Year Bond Yield
- Dow/Gold Ratio
- GOFO Vs. Gold
- Gold/Silver COMEX
donderdag 1 november 2012
Abonneren op:
Reacties posten (Atom)
I don't think this has do with earnings. The real reason is that bank cartel is trying to cap miners and gold.
BeantwoordenVerwijderen