RE: RE: RE: Gold IndexIf a miners selling price rises by 50%, and its costs of operation also rise 50%, its profit will rise by 50% as well. In truth, the rise will be even greater as its sunk capital costs remain unchanged.
Hence, there is no validity to the oft repeated claim that the gold miners share price should not equal the price of gold rise due to rising costs. All this assumes, of course, that no forward selling hedges are present to foul the picture.