SA braces for impact as rand breaches R17/$ – can gold exports help?

The prolonged conflict in the Middle East is tightening its grip on the world economy, and South Africa is firmly in the firing line. As markets opened on Thursday morning, the rand was trading at R16.99/US$ against the US dollar, while Brent crude oil surged to $112 a barrel, a warning sign of mounting pressure on fuel prices, inflation, and already-strained household budgets. For a country grappling with slow growth, high unemployment and fragile consumer confidence, the ripple effects are becoming impossible to ignore.

What began as a distant geopolitical crisis is now translating into real, everyday costs for South Africans, and the outlook suggests the worst may not be over yet. Dr Bonke Dumisa, an independent economic analyst, said the escalated military attacks on Iran have messed up the global economic environment. He highlighted that market indicators opened significantly negative, and the price of Brent crude oil signals a bad time ahead for South Africans.

South Africa imports all of its oil. The country pays in dollars, but uses the rand. When Brent crude oil spikes, petrol prices follow within weeks.

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That means higher transport, food, and retail costs, and interest rate cuts getting pushed further out. “You must remember that the weakening of the rand is inflationary for South Africa, especially for Brent crude oil, which we buy in US dollars,” said Dumisa. “The rand opened relatively significantly weaker at R22.54/UK£ against the UK Pound Sterling, Great Britain Pound (GBP), compared to yesterday’s opening rate of 22.23.

The rand opened relatively significantly weaker at R19.47/€ against the European Union’s Euro, compared to yesterday’s opening rate of R19.19.” Dumisa added that the gold price fall continues, as it opened at US$4754, down from Wednesday’s opening price of US$4990. “Please note that the fall in the gold price does not mean that gold is no longer a safe haven; it simply shows that the quick rise in the gold price from below US$4000 at the beginning of October $2025 to over $5397 at the beginning of March 2026 was not just a safe haven but very speculative,” he said. For South Africa, which mostly has to accept global prices rather than set them, the impact of the conflict cannot be ignored.

However, National Treasury said it is betting on gold prices pulling some weight against the high cost of oil. As a result of the high cost of oil, petrol and diesel prices are expected to increase significantly at the start of April.

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