South Africans owning gold jewellery and bullion investments have benefited from the sharp rise in the price of gold this week, including when it hit record levels in rands this month.
In addition, a record gold price benefits the local gold mining industry, which produced about 110 tonnes of bullion in 2022, worth billions of rands.
The South African gold mining industry employs over 90 000 people.
In addition, the South African fiscus benefits from the higher price of gold.
The price of the Absa NewGold exchange-traded fund (ETF), which is listed on the JSE, earlier this month hit a record high of R365.99 a unit. Ten years earlier, a unit of that ETF was worth about R124, reflecting the long-term gains in the precious metal’s price.
Each unit of the gold ETF gives an investor exposure to the price of one-hundredth of an ounce of gold.
The gold price in rands has reached record highs due to the rand falling to an all-time low against the US dollar of R19.52 this month.
Internationally fears about a global recession are also supporting the price of gold.
UBS wrote on its website this week that rising US recession risks might prompt safe haven buying of gold. The Swiss bank added that another positive factor driving investors’ interest in gold was the robust worldwide central bank demand for the precious metal.
“We continue to see gold hitting $2 100 per ounce by year-end and $2 200 an ounce by March 2024, and retain our most-preferred rating on gold alongside our positive stance on broad commodities,” UBS added.
In US dollars, gold hit about $2 050 an ounce this month – close to its record high of $2 075 set in August 2020. Late on Friday, gold in US dollars stood at $1 980 an ounce.
The gains in the gold price have benefited the share prices of several JSE-listed gold counters, with many hitting record levels this month.
Earlier this month, the share price of AngloGold Ashanti on the JSE reached a record high of R556.88. However, by the close on Friday this week, it was quoted at R470.66.
The share price of Gold Fields, which owns the mega South Deep gold mine to the west of Johannesburg, shot up to a record R326.52 this month.
Harmony Gold’s JSE share price reached an all-time best of R102,35 this month. Harmony operates gold mines in Gauteng, Free State and North West. It also owns the Hidden Valley open-pit gold and silver mine in Papua New Guinea.
Earlier this month, the share price of Pan African Resources reached R4.85 – the best level since 2021. Pan African Resources operates the Barberton and Evander gold mines in South Africa.
The shares of DRDGold this month had a price of R25.46, which was the stock’s best level since August 2020. DRDGold mainly extracts gold by reprocessing old gold dumps in South Africa.
