The gold price has almost doubled within a year to an unimaginable record high to reach over $5 000 from $2 600 a year ago.
Two years ago, economists said a gold price of $3 000 per ounce was far out of reach. A year ago, the gold price was just $2 600, but then volatile geopolitics started driving it higher: first past $3 000 and then past $4 000, prompting economists to consider whether $5 000 is possible.
Well, here is our answer. This morning, the gold price crossed the psychological line of $5 000 for the first time ever and is now trading at $5 074.48. The rand is also doing well, currently trading at R16.08.
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Geopolitical chess game picking up momentum, and gold offers safe haven
Maarten Ackerman, chief economist at Citadel, says as we enter 2026, the geopolitical chess game is picking up momentum, especially with US President Donald Trump’s involvement in Venezuela and the talks around the invasion of Greenland.
“All of that is causing a lot of uncertainty and putting pressure on the dollar. As a result of that, it is a continuation of what we saw last year, where the gold price is acting as a safe haven, the reason why the gold price is doing extremely well this year.
“Again, it is not only gold. We noted a continuation in other commodities, such as platinum and silver. Therefore, for South Africa, the gold price going up means that what we export is more valuable.”
Gold is part of the precious metal basket, which includes palladium and platinum as well, Ackerman says. “Strong demand for those helped a lot in terms of the equity market last year and also added to the fiscus. That is a very positive tailwind for South Africa’s equity market.
“It is also reflected in better budget numbers in terms of our fiscal situation, which helped in terms of the ratings upgrade we had, as well as the performance of the bond market and the rand.
“Therefore, if gold continues to go higher and reaches a level like $5,000, it adds positively to our terms of trade and once again increases the value of what we export and as a commodity exporter, that supports the market.”
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Gold surging past $5 000 historic milestone
Sanisha Packirisamy, chief economist at Momentum Investment, says gold surging past the US$5 000/oz level just now marks a historic milestone in its relentless rally driven by persistent structural forces.
“Limited new supply, hampered by declining ore grades, fewer major new discoveries and mine development lead times stretching beyond ten years, cannot keep pace with the robust demand. This scarcity is amplified by:
- firm buying from central banks as they diversify in a world where the dollar has become weaponised
- record inflows into physically backed ETFs
- surging retail interest in bars and coins as a hedge against inflation and currency risks and
- heightened geopolitical tensions fuelling safe-haven flows.
Packirisamy says that, with these dynamics firmly in place and no quick relief on the supply side, analysts widely see the potential for further structural growth in the gold price.
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Gold price still increasing on back of increased geopolitical risks
Zimele Mbanjwa, investment research analyst at FNB Wealth and Investment, says the strong push in the gold price past $5 000 is driven by the same fundamental factors that supported it last year.
“The gold price started to increase due to increased geopolitical risks and uncertainties (particularly those emanating from the US), a weaker dollar, which is also being guided lower by prospects of lower interest rates, as well as bulk buying by central banks as they push to diversify reserves.”
Mbanjwa says although Trump struck a more subdued tone on Greenland at the World Economic Forum on Thursday, the discomfort around the US’s use of its economic and military might to further its ambitions remains top of mind, such as in Venezuela, as well as the more recent threats to advance on Iran.
“Add the long-standing and escalating actions and rhetoric to undermine the Federal Reserve’s independence, and you have a cocktail of factors favouring the safe haven appeal of gold, while dampening the appeal of the dollar somewhat”
Technically, Mbanjwa says, gold continues to exhibit a powerful bullish trend, and they remain constructive. “However, the price looks stretched, raising the likelihood of near-term consolidation or a controlled pullback. This could occur around a ‘psychological’ level like $5 000 and means that investors can potentially expect better entry points if they are patient.”