Record Gold Prices Push Q1 Mining Margins to $3,076/Oz Despite Rising Costs

Gold miners posted record profitability in the first quarter of 2026 as higher bullion prices outweighed a 16% annual increase in global All-In Sustaining Costs, even as royalties, energy, freight and other operating expenses moved higher.

By Paul Ploumis
Published August 27, 2026

MONTREAL (Scrap Monster): Gold miners enjoyed an exceptionally strong start to 2026 as soaring bullion prices more than offset a sharp rise in operating expenses.

Mining Costs Rise to $1,785 Per Ounce

According to the World Gold Council (WGC), average global All-In Sustaining Costs (AISC) climbed 5% from the previous quarter and 16% from a year earlier to $1,785 per ounce in Q1.

Gold prices reached $5,595 per ounce in January, pushing the quarterly average to a record level.

Royalties and Middle East Disruptions Add Cost Pressure

Higher bullion prices also increased royalty payments, which jumped 24% quarter-on-quarter and 85% year-on-year.

Royalties accounted for about 12% of average mining costs, double their share five years earlier. Changes in royalty structures in major producing countries such as Ghana, Burkina Faso and Mali have added further pressure on miners.

The conflict involving Iran and wider Middle East disruptions created additional challenges. Higher energy, freight, shipping and mining-input costs affected producers, although fuel inventories, contracts and hedging arrangements helped larger companies remain largely unaffected.

Gold Mining Margins Reach Record $3,076 Per Ounce

Despite those pressures, profitability surged. Average AISC margins reached a record $3,076 per ounce, up 25% quarter-on-quarter and 134% year-on-year.

However, the outlook looks slightly uncertain, WGC noted. Supply-chain disruptions could push mining costs higher, potentially narrowing margins in coming quarters.