Gold Demand Trends: Q2 2026

Total gold supply in Q2 was unchanged y/y at 1,269t. A 2% rise in mine production to 966t – an all-time Q2 high in our data series, which dates back to 2000 – was almost exactly offset by a 6% y/y decline in recycling to 326t.

An estimated decline in the aggregate outstanding producer hedge book reduced total supply by 23t in the quarter as those gold companies with hedge books delivered into commitments or restructured their positions.

Record H1’26 mine production of 1,867t was 3% higher than the 1,808t seen in H1’25, which at the time was the highest first half mine production in our data series.¹

Mine production

Q2’26 mine production was almost 2% above the previous second-quarter record of 948t set in Q2’25. Output increased by 7% q/q due mostly to seasonal reasons.

Notable Q2 production increases – based on data available at the time of publication – were from the following countries:

• Canada (+29% y/y) The ramp-up of new and expanding operations such as Agnico Eagle’s Detour Lake was responsible for this large increase in production
• Chile (+24% y/y) driven by Gold Fields’ Salares Norte, as it reached steady mine production, alongside newly commissioned projects such as Rio2’s Fenix
• Burkina Faso (+17% y/y) due to increased mill throughput at several operations, including West African Resources’ Kiaka, and Orezone Gold’s Bombore, which saw its first full quarter of hard rock production in Q1’26
• Ghana (+8% y/y) as Newmont’s Ahafo North continued to ramp up, while output grew at a number of operations including Asante Gold’s Bibiani mine.

In contrast, operations in some countries were hit by a mix of safety, mining and geological factors, resulting in the following Q2 production declines:

• Nicaragua (-33% y/y) principally due to a decline at Equinox Gold’s operations in the country, which are heavily weighted to Q1’26
• Mexico (-23% y/y) where Newmont’s Peñasquito mine saw lower output due to a transition to Phase 8 operations and lower grade stockpile processing; Peñasquito is not expected to return to higher grade mining until 2028.
• United States (-12% y/y) lower mine production occurred at a number of mines including Barrick’s Carlin site due to mine sequencing, and at Kinross’ operations due to lower mill head grades
• China (-8% y/y) due to ongoing safety stoppages following a fatal accident at a mine in the Shandong province.

Metals Focus, who provide mine production data, has made further revisions to output estimates for the past decade. The revisions – which are due to improved data on ASGM output in a number of countries – have resulted in an increase of 117t in cumulative global mine production since 2013. As Metals Focus directs more resources towards ASGM data gathering and more complete data becomes available, we are likely to see further revisions to mine production estimates over coming quarters.

Based on the latest available data which comes with a lag, average all-in sustaining costs (AISC) for the gold mining industry reached a record high in Q1’26, up 5% q/q and 16% y/y to US$1,785/oz. This was underpinned by a rise in royalties and corporate G&A expenses. 

The first signs of higher energy prices resulting from the conflict in the Middle East were seen at some operations during Q1, but we expect a greater impact to be seen in Q2’26 and beyond. 

Net producer hedging

Following the 22t decline in the aggregate producer hedge book in Q1, we believe that de-hedging continued in Q2’26 by an estimated 23t. Legacy hedging contracts with agreed prices much lower than the current spot prices have impacted margins at a number of operations. Some mining companies have therefore restructured out-of-the-money positions, in some cases converting forward sales to put options.

Metals Focus has revised historical estimates of the contribution of hedging to total gold production over the past five years, based on newly acquired information. For example, one privately owned Australian gold mining company disclosed a large, previously unknown hedging position during corporate restructuring.

Recycled gold

Gold recycling in Q2 fell to 326t, (-6% y/y and -13% q/q) as the gold price corrected from the multiple new record highs seen in the first quarter. The decline in Q2 volumes came despite more recycling-friendly market conditions – namely, an easing of the disruptions caused by the Middle Eastern conflict and a reduction in the capacity constraints that had contained recycling in Europe, and to a lesser extent in North America, during Q1.

Looking at country and regional-level data, one clear trend stands out: recycling volumes in emerging markets fell sharply during Q2, while activity in Europe and North America was much more resilient.

The following trends were observed during the quarter:

• Recycling in India fell sharply, -17% y/y and -38% q/q. The decline was due to the lower gold price and an increase in the exchange proportion – i.e. jewellery buyers fund, at least partially, the purchase of new items by trading-in old pieces. The exchange of gold jewellery has no net impact on supply and therefore is not captured in recycling data
• In China recycling volumes fell 15% y/y and were 19% lower q/q. Activity here continues to be influenced by the introduction of 7% VAT on jewellery sales. Buyers can, however, offset much of this new VAT charge by trading in old gold jewellery. The resulting shift in purchasing behaviour may reduce recycling of old gold jewellery in the future, while increasing the exchange of old gold jewellery for new
• The Middle East saw lower recycling activity during the quarter (-13% y/y and -11% q/q). We believe that the disruption to recycling activity as a result of the conflict with Iran receded somewhat during Q2, particularly as some commercial air travel resumed. All countries reported lower y/y and q/q recycling volumes, indicating that lower prices influenced behaviour across the region
• Recycling activity in Europe increased 9% y/y but was down -2% q/q; this was one of the regions where buyers of old jewellery were constrained by refinery capacity and financing limitations in the first quarter, so it is possible that some catch-up was seen here. European recycling of old gold jewellery has been strong over the past couple of years, which may be linked to relatively weak economic performance in the region
• The United States saw higher recycling volumes in Q2, +5% y/y and +3% q/q. As in Europe, this may be partly due to a catch up from capacity limitations in Q1’26.

Recycling trends in the second quarter reinforce our view that short-dated, i.e. q/q changes in the gold price, are more important than y/y comparisons. In Q2’26, the average gold price fell by 7% q/q and recycling volumes declined by 6%. Gold prices in Q2’26 were up 37% y/y but this didn’t drive recycling volumes higher over that comparison period – in fact, recycling fell by 13% y/y.

The impact of increased energy prices, higher inflation and some evidence of growing unemployment has not yet triggered widespread signs of consumer distress-led selling of gold. Anecdotal evidence suggests that holders of gold expect prices to recover or, in countries with weak currencies, that gold will continue to help protect them from further economic turmoil. We discuss our expectations for annual recycling supply in the Outlook section.