It wasn’t that long ago that markets were marvelling at the gold price jumping the $2,000 an ounce hurdle.
Then, hardly a month ago, it hit the $3,000 mark, as the safe haven rally that has continued since US President Donald Trump was inaugurated in January gained pace.
Some analysts now predict gold could go as high as $3,500 this year, having gained about 30% over the past 12 months.
The Trump fear factor has been driving the metal since last year. And with the world now in turmoil and equity markets tanking after his “Liberation Day” tariffs, gold has already touched more than $3,100 as investors chase safe haven assets, with this month seeing the biggest flows into gold exchange traded funds since the start of the Covid-19 crisis.
Though emerging market central banks have been big buyers in the past couple of years, an ever broader range of investors is now diving in because the outlook for other assets is so scary.
SA’s gold mining industry is, unfortunately, much diminished. But it is still a significant employer and export earner. And the price rally has provided a welcome boost to the value of SA’s gold and foreign exchange reserves.
SA should make the most of the boom, especially given the pressure on other commodity prices.
Unfortunately, super-high gold prices make illicit gold mining more attractive than before. It’s never been more urgent for SA’s policymakers to combat it and contain its growth.
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