It is hard to believe that the rand and the gold price could be doing so well while it feels like the global economy is ready to collapse on the back of volatile geopolitics. But there it is: the rand trading at R16.45/$ this afternoon, while the price of gold sits at a high of $4 447.48. The rand strengthened below R17/$ in November for the first time since February 2023 after the Medium Term Budget Policy Statement (MTBPS) that included a lower inflation target and an improved fiscal outlook.
Sanisha Packirisamy, chief economist at Momentum Investments, says therand performed wellon the back of a number of reasons: Not long ago, economists believed that a gold price of $3 000 per ounce was out of reach. Gold started 2025 on $2 600, but soon multiple economic factors drove it higher: first past $3 000 and then past $4 000. In one year!
Can we wonder if $5 000 is possible? Packirisamy says that during the course of 2025, the gold price rally was largely driven by continued central bank purchases of gold bullion in an effort to diversify reserves away from the dollar. “Geopolitical risk factors, including the recent events in Venezuela, further buoyed the safe-haven status of gold.”
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