Investors could have seen it coming. Exchange-traded funds that are backed by physical bullion were recording some of their best inflow gains since last year as the price of gold remained below the $1,300 per oz mark. With Russian troops massing on the Ukrainian border, Palestinians and Israelis lobbing rockets into and out of Gaza, the gains made by U.S. troops in Iraq falling apart, and a frothy stock market looking like it's poised for a significant correction at any moment, the idea that gold might be at an inflection seemed strong.

Gold is on fire. Source: Wikimedia Commons

The precious metal is up recently  hitting $1,309 per ounce and marking a 1.5% jump from its July 31 low. That puts it almost 7% higher from where it started the year, confounding the predictions many analysts made that gold would see additional weakness in 2014 after last year's poor performance. 

Those depressed prices certainly even caused a tumult among gold miners themselves who saw realized prices impact their financial results and led many to cut the value of their mineral reserves. Goldcorp (NYSE:GG) snipped its values from $1,350 an ounce to $1,300; Agnico-Eagle Mines (NYSE:AEM) went from $1,350 down to $1,200; and Kinross Gold (NYSE:KGC), which had already used an industry low of just $1,200 per ounce, slashed its reserved by a third as it added new costs to the way it calculated the figure. Barrick Gold (NYSE:GOLD), however, used a particularly sharp axe, slashing its estimated value to just $1,000 from the $1,500 per ounce level it had set the year before.

Now the stock of gold miner's and the precious metal's price don't walk hand in hand, but the reserve value remains important because it determines what projects the miner believes it can operate economically. They set their reserve prices below gold's spot price to give themselves leeway in the event of volatility and allow for profits based on their costs of doing business.

Maybe all that's gold does glitter. Source:

Barrick had been the most aggressive in setting the bar so high following gold attaining the $1,900 peak, but now it seems to have gone to the other extreme by going so low as the pendulum swung back. Yet that new, lower price is also behind why the miner is shelving projects as it no longer deems them viable in the lower price environment.

So will the rising price environment be a boon for Barrick? It does create a bullish environment for miners, but don't jump to conclusions that just because a low bar has been set a miner can easily walk over it. There are a number of factors to consider, including a miner's debt levels (Barrick is heavily indebted) and its all-in sustaining costs, a relatively new metric for precious metals miners developed by the industry to better reflect the varying costs of production over a mine's life by incorporating costs related to sustaining production.

*Estimated for 2014

While their ASIC tells us how efficient they can be at getting minerals out of the ground, the debt-to-EBITDA ratio gives us a sense of how flexible they can be in meeting the demands on their cash flows. All of these numbers have soared since last year as gold's price plunged.

On the surface Yamana Gold (NYSE:AUY) perhaps represents the biggest surprise in that while it maintains an industry-leading low-cost ability to operate, its debt levels have exploded. But if investors recall that was largely the result of its acquiring along with Agnico-Eagle the prized Canadian Malartic mine owned by Osisko Mining, an asset it was willing to engage in a bidding war with Goldcorp to capture, we can see that it remains a top choice for investors.

Gold's going up and that should benefit miners, if not directly, but not all miners are equal. Looking beneath the hood and seeing whether one can still maneuver will help in profiting from gold's coming rise amid increasing geopolitical turmoil.