Gold, platinum and other commodities maintain rand’s strength

The South African rand’s 30% gain against the US dollar since the height of the pandemic has outstripped emerging-market peers – and the rally may not be over yet.

South Africa’s currency has recovered all its losses since it slumped to a record in April last year, and then some. Strong commodity prices, such as gold, PGMs, iron ore and most of others, and the global search for yield should support the narrative for further gains in coming months.

Domestic fiscal metrics – though still far from healthy – are improving along with terms of trade, while the government’s crackdown on corruption is also fuelling positive sentiment.

On Tuesday morning, it was trading at around R14.05/$ – after dipping to below R14/$ on Monday, its best level in 16 months.