The rally has lifted other precious metals, including platinum and silver, and has contributed to a stronger Rand, which appreciated by an estimated 14% against the United States (US) Dollar last year and a further 3% so far this year.
Speaking to Channel Africa on Monday, Peter Major, Director of Mining at Modern Corporate Solutions, described the surge as a “perfect storm” driven by multiple global pressures, including rising geopolitical risk, supply insecurity and unconventional economic policy in the US. “Countries now feel they must secure their own resources because they cannot rely on others,” he said. “That’s creating a huge squeeze in resources.”
Major pointed to political and monetary pressures in the US, saying markets are increasingly pricing in concerns over large‑scale money printing and interference in interest‑rate policy. “If the currency keeps depreciating, people don’t want to hold it. They want to hold something that keeps value, and gold fits that bill,” he said.
He added that a growing number of countries are seeking to reduce their reliance on the US Dollar, increasing demand for real assets such as gold, silver and even industrial metals like copper and tin.
South Africa, he noted, remains heavily dependent on commodity prices despite the shrinking size of its mining sector. The record gold price is expected to significantly boost mining revenues and tax earnings. “If the gold price doubles, income taxes can go up three or four times,” Major explained.
However, he warned that investing in gold at current levels is “gambling” rather than a long‑term investment, advising caution and suggesting mining equities as a less risky alternative.
–ChannelAfrica–
