Global gold production hits record high, but supply bucks trend and declines! Who doesn’t want to sell gold?

Global gold mine output hit a new high in the third quarter, but market supply bucked the trend and declined. According to the latest data released by the World Gold Council, Canada's gold production increased by 22% annually in the third quarter of this year, far exceeding the global average growth rate. Global gold mine production also increased by 3%, reaching a record 1,071 metric tons. However, due to the reduction in recycling supply and the further reduction of unclosed safe-haven positions by manufacturers, the total global gold supply fell by 1%, resulting in an increase in output but a decrease in supply. "The Northern Miner" reported that Canada's gold production has increased significantly, mainly due to the successive commissioning of new mines, including Equinox Gold's Valentine gold mine in Newfoundland and Labrador and B2Gold's Goose gold mine in Nunavut. Together with the increase in output of existing mines, the overall output growth has been promoted. In other countries, gold production in Indonesia increased by 21%, Chile increased by 19%, but Australia decreased by 12%, and the United States decreased by 7%, mainly due to the decline in the gold content of ore and the adjustment of mining plans. In the first nine months of this year, global gold mine output increased by 2% annually. The World Gold Council predicts that if large-scale production does not fall short of expectations in the fourth quarter, full-year output is expected to hit a new high. However, as gold production increases, mining costs also continue to rise. According to Metals Focus data, the global gold industry’s average all-in sustaining costs (AISC) per ounce reached US$1,930 in the second quarter, an annual increase of 22%, setting a record high and the fastest annual cost increase since the beginning of 2013. It was mainly affected by rising energy and consumable prices, as well as increased maintenance capital expenditures. In comparison, the average price of gold in the third quarter was US$4,262 per ounce, an increase of 23% year-on-year. It is worth noting that the global supply of recycled gold decreased by 8% in the third quarter to approximately 314 metric tons, the lowest level since the end of 2023. Among them, China's gold recycling volume dropped by 20% annually; some holders in India chose to borrow gold as collateral instead of selling it directly. In addition, some people expected that gold prices would continue to rise, which also reduced their willingness to sell. On the other hand, central banks around the world continue to increase their gold reserves. In the third quarter, gold purchases increased by 42% to 321 metric tons. In the first nine months of this year, they purchased a total of 675 metric tons, an annual increase of 6%. Among them, China and Poland combined increased their disclosed gold holdings by approximately 104 metric tons. However, about 63% of the central bank's gold purchases in the third quarter were estimated data from undisclosed transactions. Gold ETF holdings increased by 211 metric tons in the third quarter, but demand for gold bars and gold coins fell by 19%, and jewelry consumption fell by 17%. As a result, the World Gold Council lowered its forecast for investment demand growth this year from 400 metric tons to 200 metric tons, and reminded that although central bank gold purchases may support gold prices, buying is still affected by price, and there is no guarantee that there will be a clear bottom for gold prices.