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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 379.87+0.4%Nov 11 4:00 PM EST
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To: Julius Wong who wrote (186395)4/15/2022 5:01:33 AM
From: Haim R. Branisteanu   of 217703
 
Julius Wong would try to explain why the substantial rise in gold stocks to small rise in physical gold.

Company A has ZXC amount of reserves in gold depending on quantity of gold/ton of rock there is a relative correlation between the price of gold and the proven gold reserves, but highly dependent on the quality/abundance of gold in the ground. My understanding that 2 gram/ton of gold /ton of rock is marginal productive under present extraction practices.

Treating the pulverized rock with cyanide as they try to do it in Ro?ia Montana in Romania makes big difference but then what to do with the cyanide mud is a big problem.

Now assuming that extraction cost of gold stay stable and the price of gold surpasses the threshold of profitably extracting gold from the company A reserve the company A profitability rises much more quicker than the price of gold.

Therefore the yield on gold stocks move much more than the difference of actual gold prices.
As stocks are mostly judged by the free cash-flow and yield it is obvious that above certain level of gold prices certain stocks accelerate their rise in pricing well above the price of the physical gold.

Therefore your graph is irrelevant to my original statement.
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