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Is Inflation Helping Or Hurting Gold Miners?



  • This is the top news for the gold & silver mining sector for the month of October 2021.
  • New Found Gold is raising $48 million from a key investor and increasing its drill program.
  • Equinox Gold breaks ground at a new major gold mine in Canada.
  • Newmont reported higher than expected cash costs due to inflation.
  • Inflation is supporting gold prices but hurting miners' cash costs. Should investors start to worry? I discuss top news and recent developments below.
  • Looking for more investing ideas like this one? Get them exclusively at The Gold Bull Portfolio. Learn More »


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Gold Mining Bull: Top News For October 2021

It's a frustrating time to be a gold & silver mining investor as we enter the Q3 earnings season, and close out a challenging year: Gold prices (

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This article was written by

Gold Mining Bull profile picture

Gold Mining Bull is a gold analyst with more than a decade of investing experience in commodities, hard assets (gold and silver miners), exploration companies, oil and gas producers, MLPs, and more.

Gold Mining Bull is the leader of the investing group The Gold Bull Portfolio where he gives you exclusive access to his portfolio, buy/hold/sell ratings, in-depth research and actionable analysis on 150+ gold, silver, copper, natural gas, and mining stocks, and more. Learn More.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of NFGC, KL, GOLD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (18)

Slightly prefer SIL's holdings over SLVP, but the former's div is $1.32%Y, compared to 3.49 for SLVP.
@Doctor Don, prefer SILJ to both - see Andrew Hecht’s Seeking Alpha pieces over the past year.
mikeOO profile picture
Central Bankers are holding gold down. But with all the printing they can't keep it down forever.
@mikeOO I am long gold, but I disagree that they can't keep it down.
I feel entire bond market is rigged and if they can rig bond market gold is drop in a bucket to "manipulate". Even if world stops buying T bonds, Fed print digital dollars and move into foreign banks (of course 0%) to buy T bonds (they might be doing this ..who knows). This will not end soon, as this will need rude awakening and America has way too much wealth (land, natural resources etc.) ..said that at this rate Fed printing to sustain market it is not far but at least 3-8 years away in my opinion if not more.
panzer profile picture
@SomaBull who writes and asks: "Please let me know if I missed any big news in the comments section below".

A serious question must be asked, since @SomaBull says the miners now offer a terrific proposition to own (although less say after today's thrashing in the POG), as to whether gold is turning into china. I do not mean the country, I mean the tableware. I have a large cabinet next to me, full of my mother's old china (which she never used, as it was too valuable and precious). Now, my brother and I think nothing of grabing a new plate of china, or a cup, because it is no longer precioius and valuable. It is just old china that is hard to give away in the modern digital age. I do not have the slightest doubt that but for cryptos, Gold would be soaring over 2500, and the miners more than double their current price, in today's inflation age. Cryptos have stolen over 2 TRILLION dollars worth of new investors who see crypto as a way of getting out of the radar, and off the grid, of the government tax men and associated thieves. These are the precise reasons people used to want to own gold. And consider this, there is a new horror that awaits gold investors: What if when digital currencies backed by the govrernment appear, the western communist movement takes a second step and simply declares gold and silver ownership to bre illegal? This next step is a trifle for the western dictatorships currently droning and owning hte populations. The governments cannot get to bitcoin, and china has tried but without success, but they can make gold and silver illegal by passing a simple law. These UniParty Establishment governements think nothing of taking this step. After all, with new software, which is not audited, they cannot be voted out of office. I think Gold is probably on its way out. That is pretty obvious in looking at its performance and its desultory habits in this inflation, crypto age. Modern investors, especially young ones, do not want it.
TheOldHand profile picture
@panzer I like your insight. However I have faith in government. Government will find a way to tax and control crypto -- in fact they've already started with information requests on tax forms -- and when they do, crypto's day in the sun will be over and gold will shine.

The only worrisome question is when?
For me, inflation will affect mining companies differently depending on their stage of development. It will increase the capex, for example, CDE foresees a 10 to 15% increase in capital expenditure because of inflationary pressures on the 4 packages not yet allocated for the modernization of its Rochester mine. Inflation and the shortage of materials and labor are expected to handicap mining companies under construction or modernization, but correspondingly lead to higher prices for precious metals. Therefore, shouldn't we give priority to mining companies who have already incurred most of their development costs, for example those who are starting to operate over others who have not yet begun their physical development. The former would have the double advantage of anticipating costs and higher selling prices?
The Gold price can be higher go us soon, and I look on shares from MTA, an strong Streamer in the future.
matt.wood profile picture
The Gold price is rigged by endless paper shorts and some illegal manipulation hence JP Morgan getting fined $900 million not long ago. Gold as an investment is a waste of space until some honesty returns to the Metals Exchanges.
@matt.wood Pay a pennies on the dollar fine while banking billions in profit for a couple decades and screwing thousands of individual investors, gold miner shareholders, and investment funds? Sign me up for that.
Other than one or two voices notice how you never hear a peep out of mining company executives as they pull in big compensation and close their eyes to the theft taking place on their watch.
HUI (Gold Miner producers) down 16 % on the year, mirroring GDX’s - 17 %. Have the weak hands all been shaken out by now?
Inflation hurts miners when the inflation adjusted money the miners mine refuses to go up in price due to paper tomfoolery.
zorionak profile picture
Is there a way of gauging the amount of short-selling affecting the miners? What do think are the possibilities of a short squeeze in the near future?
Doc 224899 profile picture
@zorionak Yup.

Pull up the quote for each individual miner, and look at the number to the right of the label "short interest".
Doc 224899 profile picture
Question: "Is Inflation Helping Or Hurting Gold Miners?"

Answer: "Yes"

Suggestion: be mindful of the Answer when making investment decisions in this sector.
Chancer profile picture
I am from Alfred E. Neuman University whose motto is :"What, me worry?"

NAK should give it up because they will never build Pebble as long as Democrats hold power. NAK has a better chance of building condos on their property than a mine.

In the "niche" where I buy gold miners, I am doing OK.

I have been concerned (not worried) about a possible major correction in the gold price. But the longer this is delayed, the less likely it is looking; although gold can always correct at any time- big time. You just have to remain prepared for that at all times.
Don't know for Gold Miner but it definitely hurting Gold miner investors. Traditionally Gold was a hedge against inflation ..in new world BTC is hedge. :)
No one knows if/when BTC money will start flowing into Gold. We need more than Jack Dorsey to invest in physical metals to hedge against inflation. Inflation is not only guaranteed, it is visible on grocery markets and any other shopping floors. Sooner OR later the Silver and Gold train will take off ..and every day we getting closer to that day. I agree with author SILJ best way to play Silver.
@gambler007, yes, SILJ + individual names PAAS, HL, AG & WPM, which I include because it streams more in silver than others in that space. Like Neumeyer’s decision to hoard some of AG’s silver for future sale - why give it away at depressed levels - he’s playing the long game, which shareholders should applaud.
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