Today Gold Rate
Like I have mentioned the involvement of Federal and Central Banks can be intervening in the market to control How High the gold price will go and Today Gold Rate. That is the major difference here among today’s gold rates. So, those who continue to believe Harry Dent’s forecast that gold rate today will go down to $700 an ounce, are not considering the Cost of the production. Harry Dent spends a lot of money advertising to get people to buy his books or newsletters. Touting a $700 gold rate today gets people motivated in buying what he sells.
Unfortunately, Dent, like most of the analysts, tends to leave out the energy in their forecasts. This is truly hilarious as energy is the leading drive of our economies, but not on the supply-demand or the finance.
The production Cost of Gold Is Higher When We Consider Capital Expenditures
Today Gold Rate
The net income and the adjusted income approach to determine the production cost of gold provides a much more realistic metric than the industry’s cash costs or all in sustaining costs. But when a mining company releases its income statements, they do not include their capital expenditures. Their net income doesn’t include the capital expenditures. To find out what they have paid in CAPEX, we must look at the Cash Flow Statements.
If we consider what Barrick and Newmont spent on the CAPEX and then deducted it from their cash from operations we would arrive at their Free Cash Flow Today Gold Rate.
Starting from 2000 to 2016, till last year, these two top gold miners free cash flow was a net of $10 billion. If we are comparing their free cash flow of $10 billion to the total of $220 billion revenues Today Gold Rate, it only accounted for 4.5% of their revenues. Thus, Barrick and newmont’s free caash flow shows that it costs more to produce gold than it was shown in their Annual Income Statements. This means the gold miners are still enjoying free cash flow during this time.
The gold market price or Today Gold Rate was still higher than the Barrick and Newmont’s small free cash flow margin to total revenue of today’s gold reates. If we include a stock dilution as well as the dividend payouts, these two gold miners would have an even higher production cost. But, that would still not change the overall production Gold Rate Today all that much
Like I have mentioned in the article, the Fed and the Central Banks can’t push the gold price whatever they see fit. The algorithms are electronically calculating the gold market price based on its cost of production. The only way the major Banks can control the Today Gold Rate is on its way UP. This can be done by using a massive amount of paper contracts to carp the gold price from moving up too high.