South African rand gains as gold scales new peak
JOHANNESBURG, March 18 (Reuters) - The South African rand strengthened on Tuesday, helped by the gold price extending its historic run to a new all-time peak.
At 0814 GMT, the rand traded at 18.0175 against the dollar , about 0.4% stronger than its previous close.
here.
Gold hit a record high of $3,018.66, continuing its rally as investors seek cover from trade tensions sparked by U.S. President Donald Trump's tariff war.
South Africa is a major producer of precious metals, and analysts say a record gold price could encourage local miners to boost output.
"At some point a gold price that continues to rise will excite local miners to make a greater effort to mine difficult-to-reach gold deposits. What may not have looked viable several years ago must be looking interesting now," said ETM Analytics in a research note.
The rand has proved resilient despite an uncertain domestic and global backdrop.
The national budget is deadlocked for the first time in the post-apartheid era because of disagreements in the ruling coalition.
Relations with the United States have rapidly soured since Trump's return to the White House in January, with the U.S. leader cutting aid to South Africa and analysts saying the African country's preferential trade status under the U.S. African Growth and Opportunity Act (AGOA) could come under threat.
In terms of domestic data, the focus this week is on Wednesday's inflation figures (ZACPIY=ECI), opens new tab and Thursday's monetary policy announcement (ZAREPO=ECI), opens new tab. Economists polled by Reuters think the South African Reserve Bank could pause its rate-cutting cycle given abundant risks.
The Johannesburg Stock Exchange's Top-40 index (.JTOPI), opens new tab last traded up about 1%. The benchmark 2030 government bond was flat, with the yield at 9.17%.
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