As spot gold continued to rise, the world's largest gold mining companies did not keep up with the upward trend.

Affected by the situation in the Middle East, Russia, and Ukraine, the price of gold has increased by a cumulative total of 13% since this year. On Friday, as the dollar's gains subsided, spot and futures gold gains once again hit a record intraday high. COMEX's June gold futures closed up 1.6% to 2345.4 US dollars/ounce, rising 4.78% this week, breaking the biggest weekly gain since the week of October 13, 2023, which was recorded in the week of March 8, and has been rising for two consecutive weeks.

At the same time, however, the stock prices of the world's largest gold mining companies are rising weakly. Until the close of trading on Friday,$Newmont (NEM.US)$The stock price has fallen by a cumulative total of about 3% this year, and its main competitor$Barrick Gold (GOLD.US)$The share price declined by around 0.59%. Even after experiencing a rebound on Friday, there is still a huge gap in the performance of gold mining stocks compared to gold.

The divergence between gold mining stock prices and gold prices breaks the traditional rule that gold miner stocks should be superior to gold itself. Analysts believe that this divergence may be related to the rising costs of miners due to inflation.

Since the beginning of 2020, as panic swept through the market, the price of gold has skyrocketed. Corresponsively, miner stocks have also soared. Large gold mining companies took the opportunity to launch mergers and acquisitions to surpass their competitors while expanding their scale.

However, along with rising inflation, the profits of these miners have shrunk due to rising costs due to inflationary pressure, and most companies' expenses on manpower, equipment, and processing have exceeded expectations. Costs of cement, lime, explosives, steel, etc. are all under upward pressure.

In North America, along with sharp increases in wages and other costs, companies such as Newmont and Barrick Gold are facing major challenges. According to media statistics, the total operating expenses of Denver-based Newmont in 2023 were 43% higher than analysts' expectations.

Newmont's $15 billion acquisition of Newcrest Mining (Newcrest Mining) was also questioned by shareholders as gold production fell short of expectations.

According to market analysts, the future performance of gold mining stocks depends on the prospects for inflation and cost control. If inflationary pressure eases and company costs improve, gold mining stocks are expected to make up for the market.

Editor/Somer