Skip to main content
Invest Now
012 012 5270
Copyright © Aluma Capital (Pty) Ltd. All rights reserved.
Aluma Capital (Pty) Ltd is a registered Financial Services Provider (FSP 46449) in terms of The Financial Advisory and Intermediary Services Act (37 of 2002)
Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
November 7, 2024

South African Gold and Foreign Exchange Reserves

In October 2024, South Africa’s International Liquidity Position improved in dollar terms, with gold reserves rising due to a 5.1% increase in gold prices. While foreign exchange reserves remained stable, the Rand showed slight volatility. Key commodities like gold and platinum signal positive trends for the mining industry, but potential geopolitical tensions and U.S. elections may impact future volatility and inflation expectations.

The South African International Liquidity Position, as indicated by the Net Gold and Foreign Exchange Reserves, showed improvement in dollar terms during October 2024. Although the Rand value slightly decreased as it appreciated against the U.S. dollar, gold reserves rose in both rand and dollar terms, driven by a 5.1% monthly increase in gold prices.

Foreign exchange reserves experienced a slight decline but remained relatively stable throughout October, despite the Rand’s marginal appreciation against the U.S. dollar. Key commodities for South Africa, including gold, oil, platinum, and coal, offer valuable insights into the prospects for mining, fuel prices, and future inflation. Understanding these trends is essential, as inflation expectations will influence the South African Reserve Bank’s Monetary Policy Committee (MPC) in its upcoming interest rate decisions.

In October, the rise in gold prices was linked to heightened risks from the conflict in the Middle East, prompting investors to seek the safety of gold during uncertain times. Platinum prices also increased, while oil prices edged slightly higher in October; however, coal prices remained stable.

The uptick in gold and platinum prices is a positive development for the mining industry. A stronger Rand and stable oil prices also support favourable inflation expectations and upcoming interest rate decisions in November. Nonetheless, the situation could shift quickly; any further escalation in the Middle East may drive international oil prices higher and cause the Rand to depreciate.

It is important to note that the Rand may remain soft and volatile in the weeks following the U.S. presidential elections, particularly with the return of former President Trump to the White House in January 2025. His protectionist economic stance and potential foreign policy considerations may impact the Rand’s performance in the near term.

Back to News

More Coverage

Producer Price Inflation

October 2025
In October 2025, producer price inflation rose to 2.9%, an increase from 2.3% in September. However, on a monthly basis, there was a slight decline in producer prices, down by 0.1%.

Retail Sales Performance

September 2025
Retail sales in South Africa rose by 3.1% in September, slightly exceeding market expectations of 3.0%, as anticipated by analysts for that month. This growth indicates a continuing recovery in consumer demand within the economy.

SARB Lowers Interest Rates as Stability Improves

The South African Reserve Bank (SARB) has taken a prudent and measured step by reducing its base interest rate from 7.0% to 6.75%, marking a significant moment in the country’s monetary policy trajectory. This decision, made by the Monetary Policy Committee (MPC), underscores the bank’s cautious optimism about South Africa’s economic outlook amidst a complex global backdrop.

Consumer Inflation

October 2025
In September 2025, the Consumer Price Index (CPI) saw a modest rise to 3.4%, slightly up from 3.3% in August, yet just below the analysts’ forecast of 3.5%.

Why Aluma does not Force an Interest Cut

Cautious Optimism Amidst Inflation and Reform Momentum
As the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) prepares to announce its interest rate decision later this week, market watchers are closely divided between expectations of a modest cut and maintaining the status quo. With approximately 70% of economists foreseeing a 25-basis point reduction from 7.00% to 6.75%, the prevailing sentiment reflects confidence in economic stabilization. However, a significant proportion remain cautious, suggesting that the SARB may choose to hold interest rates unchanged for another month, given the current inflation trajectory and recent developments in fiscal discipline.
0:00
0:00