Gold Prices Outpace Mining Costs, Drive Record Margins Despite Inflationary Pressures

The World Gold Council reported that rising gold prices outpaced mining costs in Q1'26, leading to record margins and cash flows for producers. The global average gold producer All-In Sustaining Costs (AISC) rose by 5% quarter-on-quarter and 16% year-on-year to USD 1,785 per ounce during the first quarter of 2026.

The report highlighted that escalating royalty payments served as the primary cost driver for the quarter. Spot gold prices reached historic highs, momentarily touching USD 5,595 per ounce in January. This revenue expansion led royalty payments to surge by 24% quarter-on-quarter and 85% year-on-year, doubling their share from approximately 6% of AISC in Q1'21 to 12% of the average operation's cost base in Q1'26.

Fiscal regime changes and growing resource nationalism in West Africa also accentuated cost burdens across several jurisdictions. Ghana introduced a sliding scale royalty system in March, reaching up to 12% for prices above USD 4,500 per ounce. Despite these cost increases, average gold prices rose by 17% quarter-on-quarter and 70% year-on-year, driving average AISC margins up by 25% quarter-on-quarter and 134% year-on-year to a record USD 3,076 per ounce.