Canadian gold production rose 22% in the third quarter as newly commissioned mines ramped up, outpacing a 3% global increase, the World Gold Council said Tuesday. Worldwide mine output reached a third-quarter record of 1,071 tonnes. Total supply nonetheless fell 1% to 1,369 tonnes because recycling declined and producers continued to unwind their hedges.
The figures matter because they show how little a record mining year may add to the market. Higher output is arriving at the fastest pace of cost inflation in more than a decade, and central banks, not consumers, are doing most of the work of holding up demand.
Where the Growth Came From
The Council attributed Canada’s gain to recently opened operations, notably Equinox Gold’s Valentine mine in Newfoundland and Labrador and B2Gold’s Goose mine in Nunavut, along with stronger output from existing mines. Valentine entered commercial production in November 2025, so this year’s third quarter captures a full operating period against a commissioning phase a year earlier. Equinox’s own guidance calls for 140,000 to 150,000 ounces from the mine this year.
Other countries also posted gains. Indonesia rose 21%, helped by higher grades and production at Batu Hijau, the start-up of Pani Gold and a recovery at Grasberg. Chile rose 19%, supported by Salares Norte and the newly commissioned Fenix operation. Australia fell 12% and the United States 7%, with the Council citing lower-grade ore and mine sequencing at sites including Cadia, Nevada Gold Mines and Round Mountain.
Mine output is up 2% over the first nine months. The Council said the industry is on course for a full-year record unless the fourth quarter disappoints broadly.
Costs Rise Faster Than at Any Time Since 2013
Metals Focus data cited by the Council put average industry all-in sustaining costs at a record C$2,698 (US$1,930) per ounce in the second quarter, up 22% from a year earlier. That is the fastest annual increase since early 2013. The Council pointed to higher energy and consumable prices and greater sustaining capital spending. Cost figures lag production data by one quarter.
BMO Capital Markets’ GoldPages estimates show a similar direction for the producers it covers. It forecasts sustaining costs averaging $1,795 per ounce this year, up 16% from 2025, and all-in costs including development capital rising 22% to $2,298. The bank expects some relief next year, with sustaining costs easing to $1,764. BMO covers a different set of companies over a full year, so its numbers cannot be compared directly with the Council’s quarterly industry average.
Margins remain wide. Gold averaged $4,262 per ounce in the third quarter, up 23% from a year earlier. Setting that against the second-quarter industry cost implies a cushion of roughly $2,300 per ounce, though the comparison mixes two quarters. Sustaining costs also exclude development spending, so they understate what miners need to cover.
Supply Falls Short of Mine Growth
Recycled gold fell 8% to about 314 tonnes, the lowest since late 2023, despite historically high prices. The Council said some Indian owners pledged gold as collateral rather than sell it, jewelry exchanges let buyers offset new purchases with old pieces, and expectations of higher prices discouraged selling. Chinese recycling dropped 20%, partly because trading in old jewelry to offset a new tax on jewelry sales favored exchanges over outright sales.
Producers also reduced their outstanding hedges by an estimated 17 tonnes, the eleventh consecutive quarterly decline. The Council linked this to deliveries into maturing contracts and restructuring of positions, and said miners showed little appetite to lock in future prices. The combined effect of weaker recycling and hedge reductions outweighed the gain in mined gold.
Central Banks Offset Weak Consumer Demand
Central bank purchases rose 42% to an estimated 321 tonnes, bringing nine-month buying to 675 tonnes, 6% above last year. China and Poland together added about 104 tonnes to disclosed holdings. Only about 120 tonnes of the quarterly total was reported, however. The remaining 63% is the Council’s estimate of unreported buying, which limits what can be said about who is purchasing.
Gold-backed exchange-traded funds added 211 tonnes after second-quarter outflows, 6% less than a year earlier. Consumer demand weakened. Bar-and-coin purchases fell 19% to 268 tonnes, and jewelry consumption dropped 17% to 313 tonnes, the weakest third quarter in the Council’s series. Total demand, including over-the-counter activity, fell 1%.
The Council halved its forecast for this year’s growth in investment demand to 200 tonnes from 400 tonnes. It raised its expectation for central bank buying, which it now sees at least matching 2025.
What to Watch
Central bank purchases are the main support for the market, but the Council cautioned that buying “appears sensitive to price” and does not imply a firm floor under gold. With recycling subdued, hedging shrinking and consumer demand at multi-year lows, the balance depends on whether official buyers keep absorbing the surplus. Investors will also want to see whether the fourth quarter confirms a record production year and whether the cost increases recorded in the second quarter begin to ease, as BMO projects for 2027.
Naresh Kumar