5 May, 2023

Total supply rose 1% in Q1 due to record mine production and higher recycling.

  • Q1 mine production increased 2% y/y to a record level for the first quarter 
  • Gold recycling volumes rose by 5% y/y as the gold price increased
  • Q1 saw a modest 8t added to the global hedge book owing to higher gold prices.
Tonnes Q1'22 Q1'23   YoY % change
Total supply 1,165.1 1,174.4 1
Mine production 843.1 856.0 2
Net producer hedging 25.9 8.1 -69
Recycled gold 296.2 310.4 5

Source: Metals Focus, World Gold Council

Total gold supply increased by 1% y/y in Q1’23. This was driven by strong mine production of 856t – an all-time Q1 high in our data series, which dates back to 2000 – and higher recycling of 310t. Total supply would have increased further except for smaller y/y additions to the aggregate hedge book, but as usual there is room for substantial revisions in this data-set once mining companies have released their quarterly reports.

Mine production

Early data suggests that mine production increased 2% y/y to a little more than 856t,1  narrowly beating the previous first quarter record (a shade under 856t) set in Q1 2016.2   

On a q/q basis, production fell by 10%, due primarily to seasonal fluctuations: open pit and alluvial operations cut back or stop altogether in some very cold climates, especially in China, Russia and other countries in the former Soviet Union. Meanwhile, South Africa’s gold mining industry is subject to reduced output during the long summer holidays over Christmas and the New Year.


Mine production hit an all-time first-quarter high in Q1-2023*

Mine production hit an all-time first-quarter high in Q1-2023*

Mine production hit an all-time first-quarter high in Q1-2023*
*Data to 31 March 2023. Note: Our quarterly records go back to 2000. Source: Metals Focus, Refinitiv GFMS, World Gold Council

Sources: Metals Focus, Refinitiv GFMS, World Gold Council; Disclaimer

*Data to 31 March 2023. Note: Our quarterly records go back to 2000.

Notable production increases were seen in Q1 in the following countries:

  • Mine production more than doubled (+118% y/y) in Mongolia as commercial production was declared from underground operations at the vast Oyu Tolgoi copper-gold mine. 
  • Production increased 13% y/y in Brazil due to the ramp-up at the Salobo mine. 
  • In South Africa, mine production increased by 8% y/y despite ongoing electrical power supply disruptions. The major contributors were Kloof and Driefontein, which had higher output compared to strike-disrupted operations in Q1’22. 

Mine production in China increased by 3% y/y due to a combination of factors. The COVID disruptions experienced during Q1’22 were absent and it appears that output was less disrupted by seasonal factors this year. Ongoing consolidation of the China mining industry is leading to improved operating practices that reduce the impact of harsh winter weather on mining. Despite these supportive factors, consolidation of small producers and tighter environmental standards could generate a slow decline in Chinese mine production over the medium term. 

Operations in some countries were hit by a mix of mining, geological and weather factors. 

  • In Indonesia, mine production fell by 19% y/y due to flooding and planned lower grades from Grasberg, the large copper-gold mine.
  • In Senegal output was 8% lower y/y as lower grades reduced output from some mines, including Sabadola and Mako.
  • Suriname saw production fall by 7% y/y  on sequencing, harder ore and additional stripping at Merian, much the same reasons for the 6% y/y decline seen from Mexico in respect of the Peñasquito Mine. 

Regionally, the Central & South American region saw the largest increase, up 4t y/y, due to increases in Brazil noted above. Oceania and the CIS both saw production up 3t y/y due to higher output from Australia and Russia respectively; Other regions were broadly unchanged. 

Although it is too early to precisely forecast full-year mine production for 2023, many of the trends evident in the first quarter suggest that production will remain strong. Please see the Review and Outlook section for more details.

In 2022, average all-in sustaining costs (AISC) for the gold mining industry reached a record high, rising by 18% y/y to US$1,276/oz. This was 14%, or US$160/oz, above the previous record set in 2012. However, there was some respite for miners in the fourth quarter. In Q4’22 , the last data available at the time of writing, the global average AISC fell for the first time in 2022, dropping by 1% q/q to US$1,279/oz. For more detail and expectations on AISC in Q1’23, please see our blog. 

Net producer hedging

The global delta-adjusted producer hedge book fell by 11t in 2022, to 169t. Confirmed hedging data has led to an adjustment in our annual total for 2022: companies delivered more heavily into positions in the second half of the year as the gold price was generally lower. The increase in the gold price in early 2023 appears to have triggered new hedging activity: our preliminary estimate is for a minimal 8t rise in the industry hedge book, although we expect this estimate to increase once first-quarter company reports have been received. 

Most new hedging positions are either opportunistic in the short-term, capitalising on a higher gold price and small in size, or from companies with project or debt finance requirements. 

Recycled gold

Gold recycling in Q1 rose to 310t (+7% q/q, +5% y/y)– in response to higher gold prices – the strongest first quarter level of recycled supply since 2016. But this was a relatively subdued increase, given the price action and the challenging economic environment for many, and there were pockets of weakness as gold served its purpose as a safe-haven asset.


Gold recycling activities rose as the gold price climbed* 

Gold recycling activities rose as the gold price climbed*

Gold recycling activities rose as the gold price climbed*
*Data to 31 March 2023 Source: ICE Benchmark Administration, Metals Focus, World Gold Council

Sources: ICE Benchmark Administration, Metals Focus, World Gold Council; Disclaimer

*Data to 31 March 2023

Although up 5% y/y, we believe the 7% increase q/q is a more important comparison. This is the second consecutive quarterly increase in recycling supply and mirrors the increase in the gold price over this period. In Q1’23 the LBMA PM reference gold price averaged US$1,890/oz, almost matching the quarterly record of US$1,909/oz seen in Q3’20.

Despite the increase in recycling, the absolute volume of recycled supply was depressed primarily due to lower sales from Western markets and the Middle East. Developments in major markets are highlighted below:

  • There are clear signs in Western markets of depletion of near-market stocks, especially in the US and, to a lesser extent, in Europe where a considerable amount of 18 carat gold jewellery remains in the hands of Southern European consumers 
  • In the Middle East, ongoing political and economic turmoil has dampened sales compared with what might have been expected, as gold is seen as an asset to hold in the face of high inflation, weak currencies and heightened geopolitical risk.
  • Chinese recycling volumes were lower q/q, mainly due to the normal surge of retailer supply torwards the end of the calendar year: this is a market where q/q comparisons are less useful. Excluding China from the global total would have resulted in a 14% increase q/q, demonstrating the importance of China in global recycling totals 
  • India saw higher q/q and y/y recycling volumes, understandably so given the price sensitivity in this market. As well as consumer sales, finance companies liquidated gold holdings during the quarter. We believe this represents a mixture of defaulted loans, where gold was used as collateral, and opportunistic sales from the finance companies that viewed the gold price as high. 

Notwithstanding relatively low quantities of recycled gold supply globally, it is worth reiterating that higher gold prices, especially in local currency terms, prompted additional flows of metal in most markets. And while there were few references to distress-selling, some markets were affected, notably certain Middle Eastern countries and India. 

Barring a sharp rise in the gold price in 2023 we believe recycling supply could rise modestly over the year. For more details, please see the Outlook section.


  1. This data may be revised as more data is made available through upcoming company reports.

  2. Our data partner, Metals Focus, made relatively large revisions to its gold output estimates for 2022, increasing full-year mine production by 39t to 3,649t. The principle cause of this revision was larger than previously expected production from Russia. While collection of data on Russia’s gold market has become much harder since the invasion of Ukraine in Q1’22, available information does indicate mines were much less affected by sanctions than first thought. Following the revision, 2022 full-year mine production was just 9t shy of the 2018 record of 3,658t