The effect of energy on the price of gold

Both commodities are denominated in U.S. dollars. If the dollar falls, the commodities usually rise in price. In addition, gold and oil are linked by the phenomenon of inflation. Energy accounts for about one-third of the consumer price index (CPI), so a higher oil price has an impact on inflation. If higher oil prices now lead to rising inflation, investors increasingly buy gold, the traditional inflation hedge.

Many industries depend on natural gas, gasoline and diesel, including gold mining. If costs rise due to high fuel costs, then gold production can fall, driving up the price of gold. This is because energy is needed from the construction of a mine, through labor, to the actual production. A significant increase in oil production in the coming years is not to be expected. There is then the threat of an energy deficit. Green technologies will not be able to solve all the problems so quickly. And in an environment of energy scarcity, it drives investors into the safety of precious metals like gold.

Some people observe the gold-oil ratio. If the value is about 20, it means that for one ounce of gold 20 barrels of oil (one barrel is 159 liters) can be bought. To what extent the ratio of the yellow and the black gold is suitable for price predictions, interested people can take a look. Fact is with a gold investment one is currently certainly not badly advised.

For example, in Skeena Resources – https://www.youtube.com/watch?v=XGbt-LeQRe8 . Well financed, the company is reviving the mines Eskay Creek (according to the prefeasibility study 4.57 grams of gold equivalent per ton of rock in the open pit) and Snip in British Columbia.

Karora Resources – https://www.youtube.com/watch?v=gwDaK5XpiSk – is already a successful producer with its Beta Hunt and Higginsville mines in Western Australia. Production of around 200,000 ounces of gold is targeted by 2024.

Current corporate information and press releases from Skeena Resources (- https://www.resource-capital.ch/en/companies/skeena-resources-ltd/ -) and Karora Resources (- https://www.resource-capital.ch/en/companies/karora-resources-inc/ -).

In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.

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