Understanding why gold shares are downMaking some assumptions and using any mine as an example.
Gold price of 2100$ and mining etc. cost of 1100$ per ounce gives a profit of 1000$ per ounce.
Now gold at 1800$ and cost still at 1100$ leaves a profit of 700$ an ounce.
Thus profit has fallen 30%, twice the 15% of the price of gold, and thus the share price falls and will continue to fall along with the price of gold, however, if gold goes up to 2400$ the profit per ounce doubles from todays price. All this without any increase in the amount of gold discovered. Combine to two and it is easy to see the increasing amount of gold will offset any decline in the share price and once gold increases in price the shares have the potential to increase dramatically.
The two are the reason I purchased shares and continue to hold them knowing that the future price will inevitably be much higher. Have a great day.