Why gold miners are a leveraged bet on gold Gold price $1,500 cost $500 profit $2,000 $0 $1,500 cost $1,000 profit $2,500 Before After +25% Miner's profit $500 $0 $1,000 Before After +100% Fixed cost ($1,500) stays constant — so every $1 rise in gold goes straight to profit This is operating leverage: a small move in revenue = a large move in earnings