"In a stiff breeze even turkeys can fly" is one of those delightful sayings that has never been more true than in gold mining today where even the highest cost miners are banking profits of around US$1700 for every ounce they produce.

A major reason for that fat profit margin is the all-time high gold price which is currently sitting around $3,113/oz, up 37% in the past 12-months.

But there are other factors at work which Citi, an investment bank, has rolled into a single report which points to profits for high cost miners staying higher for longer because they are enjoying a "once in 40-year gift".

The bank's look at profit margins was one of three gold reports released in the last few days with RBC Capital Markets covering how uncertainty has become a key price driver, while in Australia, a government report forecasts a solid increase in that country's gold production.

Citi's deep dive into the gold sector stood out because it is not a routine gold-price tipping exercise. Rather it addresses the fact that profit margins are at their highest since the 1980s.

Using a five-year forward gold price of $3650/oz, results in a $1700/oz gap between the forward price and the 90th percentile of the all-in mining cost curve, a test which catches most high costs goldminers.

The record gold price is said by Citi to be one of three anomalies it examined to conclude that profit margins are at a 40-year high.

The second anomaly explored by Citi are higher than average US real interest rates, with the third anomaly in the system being the strength of the US dollar.

The bank said the three anomalies led to a situation which was unique to gold.

"By contrast, long dated copper and oil prices move in line with their perceived marginal cost historically despite relatively low levels of liquidity," Citi said.

"This disconnect between long-dated gold prices and marginal cost happens in gold because there isn't enough producer hedging relative to consumer borrowing of above ground stocks.

"This presents a relative gift for gold producers since in other commodities, such as oil and copper, five-year forward prices are anchored to their marginal cost.

RBC said in its gold report headed "Uncertainty has the Midas touch" that it expected a peak gold price of $3496/oz before the end of the year.

"It's clear that economic sentiment has deteriorated, and gold's appeal is more durable in this environment, meaning elevated prices should hold," RBC said.

"Gold continues to be priced on the basis of uncertainty, particularly tariff uncertainty in our view. While economic concerns are rising sentiment is deteriorating and recession probability has risen.

"We view gold's price patterns as tied to tariffs for now."

RBC added that the overall environment had materially changed since it last altered its view. 

"US exceptionalism headlines have dissipated, soft data has deteriorated, and stagflation light has gained momentum firming gold's support," RBC said.

But it's the uncertainty factor which underpins RBC's assessment of gold and while economic sentiment outside of gold has been dented, it's the largely the uncertainty factor which explains gold's appeal to investors.

In Australia, the latest edition of the Resources Quarterly produced by the Industry Department forecasts a 20-tonne increase national gold output to around 300 tonnes this year.

Miners eye opportunity

Mines making a significant contribution to future output include Telfer which is now under the control of London-listed Greatland Gold with the project expected to yield 0.9 tonnes of gold a month for the next 15 months. Westgold's Great Fingall mine is on track to produce 1.4 tonnes a year from later this year.

De Grey Mining's new Hemi project will be operational from next year, producing at a rate of 17 tonnes a year while expanded facilities at the Kalgoorlie mine of Northern Star should see output rise from 20 tonnes this year to 28 tonnes a year from 2028.

The department also highlighted the impact of US tariffs on the flow of Australian gold exports which traditionally head for Singapore and Switzerland.

But in January, as speculation grew about a possible tariff on gold shipped into the US, exports of Australian gold to the US grew by 283% month-on-month to a value of $4.6 billion. Overall Australian gold exports to the US were up 80% in 2024. 

Rising production coupled with the rising gold price has seen the metal regain its ranking as Australia's fourth most valuable commodity export, slipping past thermal coal to now lie behind iron ore, liquefied natural gas and metallurgical coal.

The outlook is for Australian gold production to continue rising with a forecast output next year of 309 tonnes, and then up to 377 tonnes in 2030.