Gold producers should forget the views of pontificating economists and lead the way and report in gold in accordance with their own gold standard . Whilst there are legal and regulatory obligations to report in currency, the industry should adopt a gold accounting overlay which conforms to a new standardised approach, similar to the Gold Institute's standards for cash costs, not least, to promote understanding of ultimate shareholder value.

Remarkably, when we convert dollar costs to ounces of gold, cost inflation is all but removed.

It is widely accepted that dollar capital and operating costs for gold miners have been rising over the past 10 years; however, when we measure these costs in gold ounces there has been little cost inflation .

We have analysed numerous past and future gold projects and the results tend to converge around the following:

The capital cost of a new gold mine is around 10% of its gold reserves;

Mining the gold costs around half that gold;

The ongoing capital requirement to keep the mine running costs around 5% of the gold; and

Governments end up taking around 15% of the gold in taxes.

The balance of 20% is generally left for shareholders.

Eoin Treacy's view My view – Gold miners definitely have a public relations problem and need to demonstrate that they offer optionality to the gold price and/or a competitive yield in order to attract investors back to their shares. The suggestions in the above report make sense in that regard but it remains to be seen how many miners actually take them to heart.

Following an impressive rally from the July low, the NYSE Arca Gold Bugs Index of unhedged miners encountered resistance in the region of 525 and has pulled back sharply. A sustained move above 465 will be required to check the downward bias.