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Gold Price Framework Vol. 2: The Energy Side of the Equation – Part II

by Stefan Wieler
Gold Money

In this second part of our updated gold price framework we take a deep dive into the true energy exposure of gold mining companies. We find that gold miners are not just exposed to significant direct energy costs such as fuels and power; their indirect energy exposure is even larger. Our bottom up analysis shows that ~50% of production costs of the average gold miner are closely linked to energy prices. This is in line with the findings of part I of our gold price framework which showed that a 1% change in longer-dated energy prices impacts gold prices by about 0.5%.

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