Structural change on the demand side continues. Annual net central bank purchases have remained above 900 t in recent years, with the rationale shifting from return to diversification and security of reserve assets. Gold exchange-traded fund (ETF) holdings have returned to inflow as rate expectations turned, and jewellery and physical investment demand in Asian markets continues to cushion price volatility. These three sources of demand are not synchronised, which has tended to limit the depth of one-way corrections.
The average mill head grade at the world's gold mines has fallen from 1.4 g/t a decade ago to around 1.0 g/t, pushing unit costs structurally higher. Operations with scale, a low stripping ratio and reliable energy supply are seeing their cost advantage magnified.
Supply, by contrast, is markedly inelastic. Global mine production remains around 3,650 t a year, with growth coming mainly from expansions at existing operations rather than new builds. Average mill head grades continue to fall while stripping ratios rise and a greater share of output comes from depth, together pushing unit cash costs higher. Adding labour, energy and reagent prices, the global average all-in sustaining cost has risen to around USD 1,480/oz. New projects typically take seven to ten years from discovery to production and cannot meaningfully supplement supply in the near term.
For Central Asia this opens a relatively clear window. Kazakhstan is well endowed with gold resources, its licensing regime and fiscal framework are comparatively clear, it has established refining capacity and local currency settlement channels, and its rail and road networks can support reliable export of concentrate and doré. Against some high-cost mature districts, new projects in Central Asia retain structural advantages in stripping ratio, energy cost and labour cost.
Three implications follow for the Group. First, cost control comes before volume growth: unit cash cost is the metric that carries an operation through the cycle. Second, hedging instruments should be used selectively while prices are high, securing cash flow through the construction period. Third, capital discipline must hold: projects are ranked by resources, grade and infrastructure, with priority given to areas that can generate cash flow over the medium term. The views set out here are based on public information and internal Group research, are provided for reference only and constitute no investment advice.
Resource, grade, capacity and investment figures in this article are stated on an interim basis; the Group's formal announcements and reviewed technical documents prevail.