Two years ago I found a piece of research hosted by Goldmoney. It was produced by Stefan Wieler and Josh Crumb. There are a total of 4 pieces and I am concentrating on the 3rd.

https://www.goldmoney.com/research/goldmoney-insights/gold-price-framework-vol-2-the-energy-side-of-the-equation

If interested download each of the PDFs as it is only a summary on the website. In the research, Stefan breaks down the reliance on oil of the gold miners. Directly via diesel etc for machinery and power at a remote mine site. Also indirectly rubber for huge machinery tyres lubricants and even the need to shift humans from habitation to mining sites. The scale is important the reliance per company is different as well as different sites within the same company. It is very interesting so go and read it and all the others if interested in this space.

TLDR the report says on average "energy" cost makes up ~50% of gold production costs. Oil and oil derivatives and by-products make up the majority of this cost.

Josh Crumb always highlights the "long-dated energy to gold cost". For this, I use 5 year GC (gold) futures prices against 5 Year BZ (Brent Oil) futures prices.

The scale on the right is how many barrels of Oil will 1 Oz of gold purchase.
The scale on the right is how many barrels of Oil will 1 Oz of gold purchase.

The scale on the right is how many barrels of Oil will 1 Oz of gold purchase.

Orange is the long-dated price which will remove as many of the short-term volatility of market movements. If we look at the 1 year forward purple line at two points this year 1 Oz of Gold could buy 48 barrels of Oil. That is amazing for your margins if you produce gold and consume oil.

The shift from red to green on this chart is Nov 6th 2020. On that date, gold reached ~$1960. It has again reached ~$1960 earlier this week and pulled back. The gold price if I am being kind has moved "sideways", in solidarity with my gold bulls.

The oil price, however, has broken out.

This is where we have to separate the narrative "stimulus" "money printing" "Weimar" "hyperinflation" "own gold and gold miners to save you from the craziness". From the fundamental reality. Gold miners output (gold) could buy multiples of their main input (oil). Going from mid 20s to high 40s of barrels. Right now we are heading from the high 40s to 30s of barrels.

There will be a time to buy gold and gold miners again, it is just not right now. Patience is important.