Gold forecaster index: Banking crisis triggers gold mania

 


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Sibanye-Stillwater

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The Consequences of Brexit

On June 24th, 2016, Britain voted to leave the EU. The immediate reaction was an 8% plunge in the Nikkei, financials dropped between 10-30%, negative bond yields went even more negative and gold surged 8%. George Soros predicted that we would have a 20% drop in pound and he was right. These are large moves and this is my take on what investors should be doing next. Read further here .
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Gold/silver price Vs. Oil price

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When we chart the Silver/Gold price minus Oil price, we can have a good idea on the margins of the precious metal miners although oil costs are just a small part of the overall costs (only 10% of AISC). As you can see here, the trend has been higher since 2014. => Producer Price Index by Industry: Gold Ore and Silver Ore Mining - Crude Oil Prices: West Texas Intermediate (WTI) - Cushing, Oklahoma The HUI index though (miners), has not been following the correlation since 2014. This is because the gold and silver price has been breaking down lately and sentiment is not positive. Other costs like development costs due to lower grade ore could also have a negative impact. Nevertheless, the chart above is a good indicator for the health of mining companies (comparing the gold/silver price against the oil price).   Energy costs are just 10% of the total AISC costs of a miner. So it doesn't have a significant effect on the overall costs in mining. Miners with a high strip ratio and op...
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