Gold mining stock overview
Gold mining stock is a document of title, is a paper gold securities, its price and dividends by the spot price of gold by the impact. However, gold mining stock dividend identification and determination of gold bonds is not the same as, the latter through the terms of the contract so that the relative interest of the gold price index, the former are by mining the specificity of economic decisions.
[Edit] Gold mining share prices determined
In gold mining, gold mining 1 ounces costs are by technology, wages, energy, gold grading factors. 1 oz gold earnings are from gold prices, government subsidies, taxes and other factors, the total receipts of gold mining is the extraction of gold, gold prices and mining costs of the decision. Namely:
E = Q (G + C) (4)
Here, E = total income, G = gold price, C = cost, Q = output. Gold mining industry will not put the total receipts of the proceeds distributed to shareholders as dividends, dividends accounted for only part of the total receipts. Based dividend ratio of the total receipts for the d, d is a percentage of its size are gold mining company by the decision. Gold mining stock price decision model are:
P = dQ1 (G1-C1) 1 + r + dQ2 (G2-C2) (1 + r) 2 (5)
(5)-based description of the size of the stock history prices are and gold production, gold prices, dividends in the total percentage of the proceeds in direct proportion to these factors the greater the higher the stock prices of gold; and the gold mining costs, the discount rate inversely proportional to these two factors the greater the share price of gold lower.
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Necessary to further study the issue of gold stock prices are on the gold spot price changes in response to what extent, that is, stock prices of gold in gold price flexibility.
Gold gains on gold spot price changes in response to the degree of flexibility. Flexible established for b, there are:
B = dG E (6)
Known profit margin = sales grid. Gross margins for H, it has:
H = EG = G-CG = 1-CG (8)
According to (4) type E = Q (G-C), as we study the yield per unit of production, Q = 1, it has:
E = G-C (9)
In terms of cost remain unchanged, put (9)-type fully differential, element gold :
DE = dG (10)
Put (10) and (8) type into the (7)-type has: 1b = 1-CG (11)
It has:
B = 1C = 1-GC (12)
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(12) Help the proceeds of the gold spot gold price elasticity of gross margin for the gold countdown. Gold gains in the flexibility of the price of gold is also a multiplier. (12)-based description of the size of the multiplier and cost / price ratio is proportional to the cost / price ratio the larger the multiplier the greater the cost / price ratio of the smaller, the smaller the multiplier.
Gold revenue impact of the size of gold stock prices are a determining factor, gold earnings the greater the larger the share price of gold. (12) Help cost / price ratio of the impact of gold mining are the determinants of income elasticity, but also affect the stock prices of gold determining factor.
Set up a high-cost mines, one ounce of gold production cost and price ratio (C / G) for 4 / 5, in other words, gross margins were 20%, elasticity of 5 [1 / (1-0.8)]% Under such circumstances, when the spot price of gold increased by 10%, earnings would improve by 50%.
Located in a low-cost mines, the production of an ounce of gold cost and price ratio (C / G) for 1 / 5, gross margins were 80%, elasticity of 1.25 [1 - (1-0.8)]%. In this case, the gold price rose 10 percent, revenue growth of 12.5% only.
These two different cases shows that if investors are able to more accurately predict the gold price, gold history they should buy shares of high-cost mines in order to obtain a higher income, higher share prices than the price of gold rose high rate of good times the rate of rise . Of course, if gold prices, high costs of mining stock price is several times faster than the price of gold fell, stock holders will suffer losses.
To invest in gold stocks has so attractive is because when gold prices could result in higher dividends, while holders of gold have a little income. But in times of economic crisis, gold stock prices have fallen, dividend reduction, while the gold is the best tool to hedge against inflation.
http://goldteeths.blogspot.com/2008/11/gold-history.html
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