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Gold Mining Costs Hit Record $1,930/Oz as Margins Shrink in Q2 2026
Global gold mining costs climbed 22% year-on-year to a record $1,930 per ounce in the second quarter of 2026, as higher capital expenditure and weaker bullion prices squeezed producer margins, according to the World Gold Council.
By Paul Ploumis | Published November 11, 2026
Key Points
- Record production costs: Average all-in sustaining costs rose 8% quarter-on-quarter and 22% year-on-year to $1,930/oz.
- Capital spending surged: Sustaining expenditure increased 34% to $441/oz, accounting for approximately 23% of total AISC.
- Operating pressures: Cash operating costs rose 6% to $1,215/oz amid higher labour, diesel and supply-chain costs.
- Margins narrowed: Average gold prices fell 7.2% to $4,512/oz, reducing AISC margins by 16% to $2,582/oz.
MONTREAL (Scrap Monster): Global gold miners faced mounting production costs during the second quarter of 2026 as higher operating expenses and sustaining capital expenditure coincided with declining bullion prices, according to the World Gold Council (WGC).
Average all-in sustaining costs (AISC) increased 8% from the previous quarter and 22% year-on-year to a record $1,930 per ounce. Cash operating costs rose 6% quarter-on-quarter to $1,215 per ounce.
Capital Expenditure Drives Mining Cost Increases
Sustaining capital expenditure was the largest contributor to the quarterly increase, rising 34% to $441 per ounce and accounting for approximately 23% of total AISC.
Higher labour and diesel expenses, supply-chain constraints and operational disruptions added to miners' cost pressures.
ScrapMonster Edge: Capital Spending Reshapes Gold Mining Costs
The cost increase was not driven by operating expenses alone. Sustaining capital expenditure accounted for approximately 80% of the $139-per-ounce quarterly increase in AISC, according to the WGC's underlying analysis. This highlights how equipment investment, maintenance and mine development spending can affect production economics even when output improves.
Industry takeaway: With all-in sustaining costs approaching $2,000 per ounce, producers face greater pressure to manage capital spending and operational disruptions as gold prices fluctuate. Higher AISC does not necessarily indicate an equivalent increase in recurring cash operating expenses.
Operational setbacks added to the pressure. B2Gold's Goose mine in Canada reported exceptionally high costs following a fire in its crushing circuit, while Newmont incurred additional expenses during downtime at its Cadia operation in Australia.
Lower Gold Prices Reduce Producer Margins
The average gold price declined 7.2% quarter-on-quarter to $4,512 per ounce, while average AISC margins contracted 16% to $2,582 per ounce.
Despite the decline, margins remained historically elevated, providing producers with a substantial financial cushion.
The WGC expects persistent inflationary pressures, including fuel and supply-chain costs, to weigh on mining margins through the remainder of 2026. A recovery in gold prices could provide support in 2027, although higher prices may also increase royalty expenses.