Gold Demand Surges as Central Banks and Tether Ramp Up Buying

The World Gold Council (WGC) reported that global gold mines produced 966 metric tons in the second quarter, a 2% year-over-year increase. This brings the total output for the first half to an all-time high of 1,867 tons.

Costs are rising, however, with all-in sustaining costs reaching a record $1,785 an ounce in the first quarter, up 16% from last year. Higher royalties and corporate overheads drove the increase, while energy costs linked to Middle East hostilities are starting to affect mine sites.

Australia is expected to capture a significant share of the market expansion, according to Surbiton Associates. The firm's Director Sandra Close called Australia 'probably the largest producer of newly mined gold in the world' due to its pipeline of mine expansions and developments.

China and Tether have emerged as notable buyers, with China's central bank adding 33 tons to its reserves and Tether accumulating 146 tons. Central banks will remain significant buyers, albeit at a slower pace than in previous years, according to Louise Street, senior markets analyst at the WGC.