How the US Federal Reserve Rate Hike Impacted South African Gold Prices
Key Highlights :
The South African gold market was sent into a frenzy on Thursday following the US Federal Reserve's decision to increase interest rates on Wednesday. This news sent the rand gold price soaring to a new record high, pushing local gold company stocks ever higher.
The US Federal Reserve's decision to raise interest rates has been seen as a sign that the world's most influential central bank is now likely to pause after a series of hikes. This news has been welcomed by investors, who have responded by buying gold as a safe haven from the ongoing US banking crisis.
The debt ceiling issue, which occurs when the US government hits its borrowing limit, has also been a major factor in the surge in gold prices. This has resulted in additional inflows into gold, pushing prices to a new record high of over R37 500 an ounce on Thursday afternoon.
The impact of the US Federal Reserve's rate hike on the gold market has been felt even more strongly in terms of the rand gold price. In dollar terms, the yellow metal rose beyond the psychologically important $2 000 per ounce mark, reaching $2 058 on Thursday.
The gold price movement has been a boon to South African gold companies, with gold miners listed amongst the top-performing JSE listed stocks in the past month. Data compiled by Anchor Capital shows that the Gold Fields share price gained almost 20% in April, while Harmony Gold was up almost 17%, DRD Gold was almost 15% higher, and AngloGold Ashanti was just over 13% higher.
The US Federal Reserve's rate hike decision has been a major factor in the surge of gold prices in South Africa, and this has resulted in a major boost for gold miners listed on the JSE. The rand gold price is now at a record high, and this trend is likely to continue for the foreseeable future.
