Global gold mines are producing more gold than ever, yet production costs are rising too. The appetite for the yellow metal is rising as well, with China and Tether emerging as notable buyers in their respective sectors.
The World Gold Council (WGC) data shows that mine production rose 2% year-over-year, reaching 966 metric tons in the second quarter. Output for the first half reached an all-time high of 1,867 tons across major producing regions worldwide.
Costs Rise, Australia Expands
Agnico Eagle Mines Limited (NYSE:AEM) Detour Lake expansion contributed to Canada’s production growth, while Gold Fields Limited (NYSE:GFI) Salares Norte in Chile reached steady state. Newmont Corp.’s (NYSE:NEM) Ahafo North ramp-up supported Ghanaian output.
The supply milestone comes with a bigger bill. All-in sustaining costs, an industry measure covering the expense of maintaining production, climbed to a record $1,785 an ounce in the first quarter, up 16% from a year earlier.
Higher royalties and corporate overheads drove the increase, while energy costs linked to Middle East hostilities are beginning to filter through to mine sites, WGC said.
According to Surbiton Associates, Australia is a jurisdiction set to capture a big share of the market expansion.
Per the Mining Weekly, the firm’s Director Sandra Close called it probably the largest producer of newly mined gold in the world, citing a pipeline of mine expansions and developments like Northern Star’s doubling of treatment capacity at Kalgoorlie and Newmont’s expansion at Tanami.
China and Tether Step In
As prices dipped, demand from official buyers strongly rebounded. Central-bank net purchases jumped 62% from a year earlier to a second-quarter record of 289 tons. That amount is five times the revised first-quarter total of 57 tons.
Poland’s central bank bought 51 tons, bringing the first-half purchases to 82 tons. Its total reserves are now 632 tons, as it gets closer to the 700-ton target. At the same time, the People’s Bank of China added 33 tons.
"Central banks will remain significant buyers, albeit at a slightly slower pace than we’ve seen over the last four years," Louise Street, senior markets analyst at the WGC, said.
Institutions ramped up the buying as the price of gold declined from record highs of nearly $5,600 per ounce to below $4,000 per ounce. China’s imports exploded as purchases rose to about 173 tons in June – the highest since March 2024.
"Investors buying the dip is an important driver of recent demand," Jinrui Futures analyst Zijie Wu told Bloomberg.
Outside of the public sector, Tether has emerged as a notable buyer in the second quarter. At the end of the quarter, the stablecoin issuer had a stockpile of 146 tons, valued at $18.8 billion.
"We remained one of the world’s largest buyers of U.S. Treasuries, reduced secured lending by $2.38 billion, and added 14 tons of physical gold," Chief Executive Officer Paolo Ardoino said, according to Reuters.
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