In the turbulent world of global economics, gold remains a reliable safe haven for investors.
Amid rising inflation, global unrest including the war in Ukraine, and lingering Covid-19 impacts, the precious metal has reaffirmed its value, with its worth surging in several nations, according to recent research by Forex Suggest.
The study revealed that South Africa has experienced an 11.31% increase in gold value over the past three years — the fifth-highest globally.
Presently, the global market for gold mining and investments is estimated at a staggering $13.2 trillion (around R233.30 trillion).
As of July 25, the price of gold in South Africa hit a new high of R35,348.10 per ounce, marking an 11.31% hike from the same period last year.
Economists cite several reasons for this upward trend, one of them being South Africa's rich gold mining heritage. As the world's eighth-largest producer of gold, the industry has significantly influenced the nation's economy.
Global economic instability — caused by the war in Ukraine, Covid-19 aftermath, and rising inflation — has spurred investors to seek reliable assets like gold, traditionally seen as a hedge against economic upheaval.
Furthermore, the depreciation of the South African rand, which lost a third of its value against the US dollar in the past year, has made gold more affordable for foreign investors.
Dawie Roodt, an economist, asserted that this increase in gold value bodes well for the South African economy, especially considering its status as a major commodity exporter. He also noted that with rising global inflation, gold represents a solid investment.
“If there's an increase in the gold price, it is usually, not always, but quite often, associated with an increase in commodity prices, generally. And if there's an increase in commodity prices, generally, then that is certainly good for South Africa because we are a major commodity exporter,” he said.
The US currently holds the top spot as the world's foremost gold nation, with the highest volume of central bank gold reserves and ETF gold holdings. Germany and Switzerland rank second and third, respectively. China, however, has emerged as the world's largest gold mining country, producing over 330 tonnes of gold as of 2022.
This development marked a significant shift in the global gold landscape, as China surpassed South Africa's 101-year reign as the largest producer in 2007.
Despite being dethroned, South Africa's gold mining heritage and its ongoing contributions to the economy are substantial. Gold mining continues to stimulate economic activity, generate employment, and contribute to the country's GDP and foreign exchange earnings.
Interestingly, the global gold market's rebound isn't solely about production. Gold demand has surged in several countries, with Egypt witnessing the highest increase at 55% year-on-year.
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