Gold’s return above $4,700 per ounce is strengthening the financial backdrop for producers, with the rise in bullion continuing to outpace higher mining costs.
October gold futures on Comex reached $4,706.40 per ounce before moving to $4,713.80, taking the metal above $4,700 for the first time since 14 May 2026. The move keeps gold well above the industry’s average cost of production and supports strong operating margins across much of the sector.
Global average all-in sustaining costs reached $1,785 per ounce in the first quarter of 2026, up 5% from the previous quarter and 16% from a year earlier. Costs are clearly rising, but the increase in the gold price has been substantially larger.
Average all-in sustaining cost margins reached $3,076 per ounce during the first quarter, an increase of 25% quarter on quarter and 134% year on year. Even producers around the 90th percentile of the industry cost curve generated average margins of $2,363 per ounce.
The figures show that the sector has significant room to absorb higher operating expenses while maintaining healthy cash generation.
Royalty costs are one area where the higher gold price is feeding directly into expenses. Royalties rose 24% from the previous quarter and 85% year on year, accounting for around 12% of the average operation’s cost base.
Some countries have also introduced higher sliding royalty structures. Ghana introduced a system in March under which royalty rates can rise to 12% when gold exceeds $4,500 per ounce, while Burkina Faso and Mali have also increased their exposure to higher gold-linked royalties. These changes make asset location and royalty structures more important when comparing producers.
Elemental Royalty Corporation (NASDAQ:ELE, TSX:ELE) is a globally diverse, gold-focused portfolio featuring world-class royalties contributing to peer-leading revenue and strong growth.
