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Gold near $4,000 highlights disconnect as gold miners fall 35% to 45%

The selloff is tied to a double shock from weaker gold prices and higher diesel costs, which can drive all-in sustaining costs higher for open-pit operations.

Reported · Written up by our desk · Mining

Gold is trading with a floor near $4,000 an ounce as central banks accumulate bullion and geopolitical tensions intensify, but gold mining stocks have fallen sharply, leaving investors facing a valuation mismatch, according to MarketBeat Ratings.

The outlet points to a broad pullback of 35% to 45% over the last two quarters in gold miner equities even as physical demand stays supported by central bank hoarding. It argues markets are pricing miners as if the sector is moving into a severe recession despite strength in the underlying commodity price.

MarketBeat Ratings attributes part of the decline to energy-related costs, noting that diesel can represent roughly 15% to 20% of cash expenses for open-pit operations. It also cites the Strait of Hormuz tensions earlier this year, which pushed Brent crude to about $115 a barrel, raising fuel costs and worsening all-in sustaining costs when gold prices later pulled back.

The analysis adds that the key swing factor is operational leverage, where profit can rise faster than revenue if input costs stabilize. It says the cost side may normalize if oil prices ease, setting up potential mean reversion in margins if operational issues and macro headwinds fade.

Latest closeGold $3,981.40 ▼1.6%|WTI crude $79.00 ▼0.8%|Brent $84.94 ▼0.0%

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