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Gold/Mining/Energy : Gold & Gold Stock Analysis

GLD 398.57

-0.2%

Dec 18 4:00 PM EST

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To: yard_man who wrote (12477)	3/12/2008 11:35:03 AM
From: Feraldo	Read Replies (2) of 29622

I don't think the miners are moving because people do not have the same confidence in a miner as the physical commodity. Right now stocks are unattractive in general and when the public views this they look for other ways to play gold. When the public finally realizes that miners make a much more accelerated amount of cash as prices reach these levels, the market for gold miners will take off. If gold is at $700 and costs are $500 and then gold goes to $900 that doubles profit, contrary to perhaps the general view where 700 to 900 should be 29% more profits. It takes a while for the public to get to this realization perhaps. Edit: The same would go for many other metal miners also. The cost structure of the business is such that recent price increases have double profits for the miners. Silver is a good one. Let's say costs are at $8/oz and price goes from $14 to $20 and ounce then profits have double for the silver companies as well. Many miners have significantly lower costs structures than the $8/$500 I used here.

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