Gold Mines Are Literally Gold Mines

quoth the raven's Photo
by quoth the raven
Friday, Mar 11, 2022 - 11:58

Submitted by QTR's Fringe Finance

“Gold mines are literally gold mines.” - Peter Schiff

I started this article with gold at about $2,050 and am finishing it with gold back under $2,000/oz, at about $1,991/oz. Such was the chaos that was the paper gold market over the last 48 hours. Regardless of where gold is trading when you read this, it doesn’t matter.

First and foremost, it finally looks like we are getting ready for gold to trade with a $2,000-handle relatively consistently.

Imagine that: $8 trillion on the Fed’s balance sheet, $30 trillion in debt and all of academia unanimously deciding that modern money literally has no substance to it – and we still needed a potential Third World War to get back over $2000 per ounce.

Yeah, nothing weird going on in the paper markets, right?

Regardless, the insanity in the world of commodities and the threat of the biggest war in Europe in more than 50 years - while Russia and China likely entertaining the idea of starting their own monetary and economic system backed by commodities - has finally given investors a wake up call they have needed for about a decade with regard to gold.

Not only are people flocking to gold as a safe haven, but people are likely taking note of the fact that Russia seems to think it can defend the ruble – which has tanked against other fiat currencies - with its commodities and its hundreds of billions of dollars in gold reserves.

Talk about leading a fucking horse to water for gold investors. Jesus…

Russian Gold Reserves

But while gold has rallied over the last month, with what feels like an incessant unrelenting bid and the technical look of a massive breakout, gold miners have surprisingly lagged.

While gold is just about -5% from its all time highs and the GLD is about -4.14% from its highs, the VanEck Vectors Gold Miners ETF (GDX) is about -30.4% from its all time highs.

This is baffling because gold miners start to achieve serious hockey stick type leverage with gold prices moving over $2000/oz.

Remember, the cost of mining gold per ounce right now is about $950 to $1,400/oz. depending on which company’s AISC you look at for 2022. It is rising about 5% a year based on historical trends, though some input costs (fuel, labor) may rise slightly higher than that due to the insane inflationary environment we are in the midst of.

That means as the delta widens between a roughly 5%...(READ THIS FULL ARTICLE HERE). 

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