Mining supply and the cost curve
Why gold supply is inelastic — and what all-in sustaining cost tells you about the floor.
Global mine production is remarkably steady at roughly 3,600 tonnes per year. Unlike oil or copper, gold supply barely responds to price in the short run. Mines take a decade to build; grades are declining; and the highest-quality deposits have already been found.
All-in sustaining cost (AISC)
AISC is the industry benchmark for what it actually costs to produce an ounce, including sustaining capital. Industry-wide AISC has climbed toward $1,400–$1,600/oz for major producers, which sets a rough marginal floor for the metal.
Why this matters for investors
When prices approach AISC, high-cost supply comes offline and the floor holds. When prices run far above AISC, miners' free cash flow surges — but new supply still takes years to arrive.
Mining stocks are not gold
Producers offer leveraged exposure but add operational, jurisdictional, and management risk. Own them as an equity bet on the metal, not as a substitute for it.
Editorial disclaimer: DeepGold Academy content is educational and informational. Nothing on this page is investment advice.