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MartinGale7
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Posts: 152
Joined: April 1st, 2011, 7:42 am

Why are gold stocks reporting low earnings?

January 8th, 2014, 7:18 am

Ok, it is no secret that gold has tanked over the past year or so. However it is still well above where it was a few years back (and a fair number of years before that even after applying some inflation adjustment).So, why this year are many gold stocks reporting poor earnings? With revenues higher (both in terms of futures and spot), labour costs still affordable and cheap finance how could they not do well!?
Last edited by MartinGale7 on January 7th, 2014, 11:00 pm, edited 1 time in total.
 
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teaplus1
Posts: 6
Joined: December 16th, 2013, 8:41 am

Why are gold stocks reporting low earnings?

January 10th, 2014, 9:04 am

Remember that revenues are not closely related to the price of gold, but rather production * price of gold.Part of the reason why gold is valuable is that it is hard to find... According to this on wikipedia, most counties are struggling to keep production up, except the chinese (and I'm guessing that these are not the companies you're looking at)http://en.wikipedia.org/wiki/File:Top_5 ... ducers.png
 
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MartinGale7
Topic Author
Posts: 152
Joined: April 1st, 2011, 7:42 am

Why are gold stocks reporting low earnings?

January 13th, 2014, 7:56 am

That makes sense.I've also been doing some digging too. Apparently once gold started to take off a few years back, the typical costs of mining gold increased even faster than the gold spot. I guess the miners had to swallow these costs and push ahead. Now that the price has come off over the past year, they still have most of the (higher) costs but less revenue.
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