Weekly Gold Market Recap: 20 January – 26 January 2025

Price Movements

Gold prices experienced significant fluctuations last week, reflecting both international market dynamics and movements in the South African rand (ZAR). On 20 January, gold opened at approximately R52,500 per ounce. By Friday, 24 January, the price surged to R53,800 before settling slightly lower at R53,600 on Saturday, 25 January. This marks an approximate weekly gain of 2.1%.

Key Drivers

Several factors contributed to gold's performance during the week:

1. Rand and Dollar Interplay:The weakening rand, driven by domestic inflation concerns and external dollar strength, made gold more expensive locally. While the dollar exhibited volatility due to uncertainties around U.S. trade policies, the rand's depreciation amplified gold's appeal as a store of value in South Africa.

2. Federal Reserve Speculation:Global investors closely monitored the upcoming U.S. Federal Reserve meeting scheduled for 28–29 January. Expectations of steady interest rates supported gold demand globally, indirectly influencing its ZAR-denominated price.

3. Geopolitical Concerns:Tensions related to U.S. trade policies, including potential new tariffs, heightened the demand for gold as a safe-haven asset. Locally, the South African economy also faced pressure from ongoing energy supply challenges, which impacted the rand’s stability.

   
   

Local Market Trends

South African buyers demonstrated caution amidst rising gold prices. Jewellery demand remained subdued, while institutional investors increased holdings in gold-backed assets to hedge against currency risks and inflation.

Outlook

As South African markets brace for further rand volatility, influenced by both global central bank actions and domestic policy developments, gold prices are expected to maintain an upward trajectory. Investors are encouraged to remain vigilant about the interplay between international gold trends and the local currency's movements.