Gold: macro, inflation, miners and price
Ongoing updates on gold price action, central-bank demand, miners and macro drivers in the precious-metals market.
1 oz of Gold: Production Cost and Miner Profit
1 oz of gold costs ≈$1500 to mine (AISC), ≈10$ to transport and refine and another ≈$400 in various other expenses.
In total, that sums to about ≈$1910 to get 1 ounce of gold from the ground to bullion gold bar.
Currently, gold trades at ≈$4100/oz (when you're reading this it's probably much higher 😄). This means there is about $4100-$1910=$2190 of margin on each ounce of refined gold. Almost all of this margin on the sale of an ounce of gold is pocketed by gold miners.
Let's compute the profit per ounce of gold from the perspective of a miner. Gold miners generally sell gold to refineries at a fixed haircut over the spot price. This haircut is generally very small, ≈$10 which accounts mainly for refining and treatment costs. So with the numbers above (also see attached image), gold miners are making a profit of $4100-$(1500+400+10)=$2190 (the same number we computed above).
The larger the premium/gap of gold's spot price over its production costs, the larger is the profit for the miners. As the cost of labor and industrial production increases due to global monetary debasement, so will gold production costs. The same monetary debasement, combined with strong demand for gold will push its price further up.
In the next 2-3 years, I expect gold price to increase by a larger proportion than gold mining costs, as gold is under several positive price pressure points (central banks, USD alternatives, monetary debasement, etc). Thus, the margin over mining costs should remain high, leading to a sustained high profit per ounce of gold for miners.
This is why gold mining stocks are currently a great investment. The same is true for other miners, such as silver.
1 oz of Bullion Gold Costs ≈$1910 to Produce
Gold's current spot price is ≈$4100. There's a ≈$2190 price gap between what gold costs to buy and what it costs to mine & refine.
The majority of that $2190 profit per 1 ounce of gold goes to the miners. Gold refiners earn just a few dollars per ounce in profit.
This is why mining stocks are currently such a good investment idea.
Europe's Gold Imports and Exports Explained
Europe has gold mines in Finland, Sweden, Türkiye and Romania among others.
Together they account for <2% of world output (≈70 tones of gold/year). Europe is heavily dependent on gold imports, with >90% of the gold for its needs being imported.
Switzerland is the world's largest gold refining and transit hub, with at least ≈50% of all of the newly minted gold passing through Swiss refineries. Refining and re-exporting is by far the largest driver of European gold imports.
Europe imports ≈3900 tones of gold per year, but only keeps 10% of it.
My prediction on gold's bottom was correct: ≈$3900 ✅
You can direct anyone who is saying that gold and silver have topped to my posts.
If you think that gold and silver have topped - I'm really curious to hear your thesis. I've laid mine out extensively in prior writings.
GOLD: look for rejection at ≈$4155
if gold's price get rejected at that price level again - you'll likely see the fall to ≈$3900 target I described in my previous post
it's a good idea to have the limit buy orders ready 😄
Gold as a percentage of balance sheet size in Central Banks (ranked):
🇯🇵 Japan (MoF + BoJ): ≈2.4%
🇨🇳 China (PBoC): ≈4.5%
🇺🇸 U.S. (Fed gold certificates): ≈15.9%
🇪🇺 European Union (ECB + Eurosystem): ≈19.4%
🇷🇺 Russia (BoR): ≈36.1%
All of the above will expand their balance sheets, but it's mostly China & Russia actively buying more gold.
Conclusions you can take from here:
➖ China's gold holdings are relatively small when compared to their Central Bank's balance sheet size, and given their efforts to promote renminbi as the invoice currency worldwide, you can expect PBoC to continue their gold purchases for the medium-long term. The gold share must at least double to come close to the current reserve currency - the U.S. dollar. All reserve currencies started on a gold and/or silver standard - and the pressure towards this direction won't be different for renminbi/yuan. When the USD became the world reserve currency with the Bretton-Woods agreement - gold certificates accounted for ≈40% of the Fed's balance sheet.
➖ Russia has built up a massive balance sheet capacity for the future. Once the international trade markets with Russia re-open, there will be a plenty of reserves to back-up a massive wave of Ruble credit. Expect Russian capital markets to rally then.
➖ European Union has a healthy relative position. Given that the Euro is currently the closest alternative to the U.S. Dollar - it's a good idea to both, expand gold reserves and promote capital markets. The latter is an explicit goal via the Capital Markets Union (CMU). Given that EU will further expand the balance sheet, it's necessary to increase the gold reserves - repricing won't be enough. Gold will make Euro more attractive, and with it the FX holdings of Euro by sovereigns.
Coffee outperformed Gold in the last 5 years
Would it be sound to conclude that coffee beans are better money and investment than gold, and that Central Banks should hold coffee & its derivatives in reserve assets?
Bitcoin has less than 20 years of price action, and it started trading at a negligent price. Gold has been money for over 5000 years and its earliest recorded price per ounce is of ≈100 days of labor
A better question is whether Bitcoin will continue to consistently outperform gold over the next 20 years. *Consistency* is key - it must be at least a store of value, including shorter-term. If you get caught in the typical >50% price drops - you may pay a high opportunity cost.
It's not just whether Bitcoin will increase more in price than gold in the next 20 years, but also how severe and long-lasting Bitcoin's corrections are.
Imagine you buy Bitcoin today and it goes into a bear market with a significant value loss in the next 4 years. In those 4 years - many investment opportunities may arise, such as in real estate, equities, commodities or bonds. If your capital is locked in Bitcoin throughout that period - that's an opportunity cost.
Gold doesn't come with those shortcomings. There is a reason why all world reserve currencies started on a gold and/or silver standards.
There is no free lunch in the markets. Higher return is almost unanimously correlated with higher risk. Quantitatively Bitcoin is high risk- it's not a matter of opinion.
This doesn't mean that Bitcoin is a bad idea, but it also doesn't mean that Bitcoin is a better idea than gold. It does, however mean, that Bitcoin isn't a replacement for gold.
And now you understand what makes gold so special. You don't have to believe me - believe centuries of price action and human history.
Gold is within the fabric of money, not just Central Banks
A lot of posts on X frame Central Banks as malevolent institutions, and by some form of conspiracy they hold gold in their reserve accounts. And apparently not holding gold is a step towards monetary freedom - even more if you forego an atomic element (Au) for a cryptographic computer algorithm (Bitcoin).
A more productive approach is asking why do Central Banks chose gold over all other commodities and assets. Every single world reserve currency, without exception, started on a gold and/or silver standard. Gold has been used as money for over 5000 years.
I've written several articles on what makes gold so special and how Bitcoin is not a replacement for gold. I'll leave them linked below
GOLD: look for rejection at ≈$4155
if gold's price get rejected at that price level again - you'll likely see the fall to ≈$3900 target I described in my previous post
it's a good idea to have the limit buy orders ready 😄
gold's lowest possible bottom for current correction is ≈$3900 (area)
the uptrend will resume soon. given the FOMC meeting next week - if that bottom arrives it should be very soon - within the next week
* this is trend analysis done in 5 mins, but likely a correct one 😄
gold's lowest possible bottom for current correction is ≈$3900 (area)
the uptrend will resume soon. given the FOMC meeting next week - if that bottom arrives it should be very soon - within the next week
* this is trend analysis done in 5 mins, but likely a correct one 😄
gold is up 20,000% since 1832
and for most of its history its price has been fixed by the government
and gold is up over 50% since January 20th 😄
silver is up over 60%
2025 is a fun year!
it's over for gold
i've already contacted central banks to dump it too
it's not a store of value or safe haven anymore
gold is only up 12% in the last month...
clear bear market.................
😄
gold and silver miners
gold and silver miners
gold and silver miners
gold and silver miners
gold and silver miners
gold and silver miners
gold and silver miners
don't forget to set your limit buy orders
maximum bottom is around early September 2025 prices
it's getting closer
the promised gold & silver sale is here
if you didn't set your limit buy orders for silver, gold & miners - it's not too late yet
currently in late-September price ranges for many. it's also a good idea to position some buy targets below the current price levels
keep watching the gold price - it's the main driver for all
FOMC meeting is next week
⏰ don't forget to setup your buy limit orders for gold, silver and their miners
⏰ don't forget to setup your buy limit orders for gold, silver and their miners
hope you enjoyed Friday's gold, silver & miners sell-off
now await for the markets to re-open
it begins in a few hours 👀
looks like crypto twitter has not discovered Mendeleev's periodic table yet 😂
gold has existed for ≈13 billion years
for at least 5,000 of those 13,000,000 years it has been money
authenticity of gold bars can be tested easily. no need to make up problems that don't exist
hope you enjoyed Friday's gold, silver & miners sell-off
now await for the markets to re-open
it begins in a few hours 👀
BTC went from $0.004 to $110,000 USD in 16 years, but gold was never this cheap in over 5000 years
Going back to the start of recorded price systems - gold's starting price per gram is ≈100 days of labor! This was in 2112 BCE, which was ≈4K years ago
So using earliest records of starting price - 1g of gold would cost ≈25K$ is today's USD 🤯 NOTE: this is an imprecise estimation - but it's useful to bring the gold vs bitcoin price increase argument in perspective. During most of gold's USD history its price has been fixed by the government/law.
Will Bitcoin be here in 5K years? No - not in its current form. Gold (Au) hasn't changed in 13 billion years
Bitcoin promo accounts love to compare BTC to gold, and they frequently cite that BTC is up much more than gold over the last 16 years. The number is big - from its inception Bitcoin is up millionth of percent
What the pro-crypto accounts fail to point out is that mathematically their conclusions are misleading. They almost always use USD as the base currency for comparison, but ignore the fact that gold was used as money several millennia before U.S. was even conceived. As such, such comparisons fail short
They also seem to selectively omit the massive volatility - gold doesn't go down 80% every other day/cycle top
The gold prices here I computed are estimates - don't take them as hard quantitive data. Read this in the context of comparing the price of gold and Bitcoin. If someone's argument is that Bitcoin is better than gold because it had a higher percentual return in 16 years - it likely lacks substance
no, "The West" is not manipulating gold and silver prices
silver and gold had retracements many times before, but I guess when it falls on Chinese holidays it becomes "western manipulation"?
≈32% of global gold demand in 2025 comes from China (estimate for jewelry + bar & coin). China is a major buyer of gold - so a lot of demand there
a more reasonable explanation is a demand dip, due to the holiday in PRC. also the US government shutdown. although I agree the idea of a magic red button saying DUMP GOLD located somewhere in the west is more exciting 😄
it's also not clear what would be the purpose of manipulating the price of gold down, as that would be benefiting China - they can buy it cheaper!
PBoC has been buying gold for years, and they will continue to do so. PBoC doesn't announce targets publicly - and they're flexible on their purchases, so again, lowering the gold price would likely allow them to buy it at a cheaper price
ILLYA GERASYMCHUK: "There are 60M millionaires and only 281M kg of gold. Do the math"
in a 6 months timeline, gold's current price dip is a buying opportunity
gold moves up by ≈13% on breakouts, thus ≈$4000/oz gold in November 2025
this means that the current move would bring the gold price up to ≈$3978, which should happen at the start of November, around November 4th 2025
so far, gold has completed ≈6% of the current move - which means there's another ≈7% to move up from the current gold price of ≈$3715
this makes ≈$4000 the top of the next consolidation range. once that price is approached - expect a larger pullback, and potentially a longer consolidation phase, which could last ≈90 days. this means that after the top of the current move is hit (≈$4000) you may have to wait for another ≈3 months before a new all time high
it's important to note that the top of the target range is close to $4000, so gold may not cross $4K before the aforementioned pullback. this means that it may take gold another 4 months before gold firmly sits over $4000/oz
≈$3515 is a great price area to long gold during the pullback
you'll need to adjust the exact price to your ticker/derivative, but in the chart you can see how to find the relevant support (assuming your asset mirrors gold spot/futures)
and remember the strong support below
that 1 hour candle on gold 😂😂
and a new all time high within all that move
to clarify: European Central Bank didn't increase its gold holdings, but the gold that ECB already owns (≈506 tonnes) increased in value, since gold's market price increased
ECB reevaluates gold at the end of every year and credits or debits the revelation account accordingly
🇪🇺 ECB gained €10.5B on gold from 2023 to 2024
2025 YTD running gains add another net positive ≈€10B & likely to be higher by the year end's gold revaluation
that's an implied ≈8% yield on gold appreciation - much more than the ECB earned from other asset buckets
