The price of gold is a good measure of inflation
Not sure I agree. In fact, I feel like objecting rather vehemently :-) I guess I did not understand your statement...
>>>Which costs of gold miners would rise in correlation to the price of gold?<<<
The price of gold is a good measure of inflation. Most companies, regardless of what they produce, have costs that are subject to inflation.
This sound like an "A sort of related to B, and C sort of related to B as well, so A and B must be related". Price of pretty much everything is used in calculation of inflation. What does that mean? That gold miners costs rise in correlation to the price of gold? I don't think so.
I would be interested to hear a cost breakdown of gold miners in general, though. Then we can really see if their costs would go up as the price of gold goes up or not.
I would think there is a lot of pent up demand for wage increases and capital equipment which suddenly materializes as the price of what they sell rises.
Certainly possible, but we are merely speculating here. I, for one, have no idea what percentage of costs salaries make up. I do know, however, that capital expenditures are NOT part of "costs" in an Income Statement - irrelevant to our discussion, in other words, as to whether or not the higher price of gold would increase the costs of a gold miner. |
