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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
February 7, 2025

South African Gold and Foreign Exchange Reserves

January 2025

In January 2025, South Africa’s liquidity position increased, with gold and foreign exchange reserves rising despite a slight Rand depreciation. The boost in gold prices and stable commodity values bode well for inflation expectations. While external factors may create volatility, key commodities support a positive economic outlook going forward
Gold and Foreign Exchange Reserves for January 2025
Gold and Foreign Exchange Reserves for January 2025

The African International Liquidity Position, as measured by Net Gold and Foreign Exchange Reserves, showed increases in both U.S. dollar and Rand terms for January 2025. Despite the Rand depreciating by approximately 50 cents against the dollar, the value of reserves in both currencies increased during the month. Additionally, gold reserves rose in Rand and dollar terms, largely due to a 7.3% monthly increase in gold prices, with the dollar price continuing to be 37.6% higher than the same period in 2024.

Foreign exchange reserves also saw a notable increase from December 2024 to January 2025, despite the Rand’s slight depreciation following former President Trump’s re-election. Key commodities for South Africa, such as gold, oil, platinum, and coal, offer valuable insights into the mining sector, fuel prices, and potential inflation. Monitoring these trends is vital, as inflation expectations will influence the South African Reserve Bank’s Monetary Policy Committee (MPC) in its upcoming interest rate decisions after the January 2025 rate reduction.

In January 2025, gold and oil prices notably increased, while coal prices remained stable, and platinum saw a rise of over $10 per ounce. A stable Rand and consistent oil prices support positive inflation expectations and future interest rate decisions following the January MPC meeting. However, the situation could shift rapidly due to ongoing international developments and diplomatic tensions between South Africa and the U.S.

It is likely that the Rand will remain soft and volatile in the coming weeks, particularly with Trump returning to the White House and ongoing disagreements between Pretoria and Washington. His protectionist economic policies and potential foreign policy changes may further impact the Rand’s performance in the near term.

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More Coverage

South Africa is trapped in severe economic stagnation, facing a projected 1.0% growth rate for 2026, 33.6% unemployment, and sharp contractions in mining (-12.7%) and manufacturing (-4.3%). Exposed to global fuel shocks via depleted reserves and >R12.00/litre pump levies, the nation is also caught in a fiscal spiral where national debt nears 80% of GDP and interest payments exceed R1 billion daily. Escaping this trap requires four urgent structural reforms: halting interest rate hikes for supply-side inflation, replacing rigid B-BBEE quotas with job-creation incentives, scrapping Expropriation Without Compensation (EWC), and deregulating Transnet’s logistics corridors.

Mining Production and Sales for August 2026

South Africa’s mining sector remains a vital source of jobs, foreign exchange and economic growth, but August’s sharp fall in mining output and sales highlights the mounting pressure on the industry. Rising fuel and energy costs, policy uncertainty and growing trade challenges are weighing on producers, even as firm gold prices and temporary US tariff exemptions offer some relief. Read the full report for a closer look at the latest figures, the forces shaping the sector and what they could mean for mining’s future in South Africa.

MACROECONOMIC & INVESTMENT INSIGHTS | OCTOBER 2026

A $100-plus oil price, a weaker rand and record fuel hikes are putting South Africa’s economy under mounting pressure, while strategic reserves offer little protection. This report examines how imported inflation is squeezing households and businesses, why higher interest rates may do little to tackle its root causes, and how sluggish growth and rising debt are tightening the fiscal squeeze. It also explores the stakes for trade with the United States and AGOA, and the policy choices that could restore investor confidence, unlock growth and put the country on a more resilient path.

International Trade and Trade Balance – August 2026

South Africa recorded a trade surplus of R20.4 billion in August 2026, as exports continued to outpace imports. Export growth has exceeded import growth over the first eight months of the year, reflecting subdued domestic demand among businesses and consumers. But with higher fuel prices and tighter monetary policy expected to weigh on spending, demand is likely to recover only gradually. Read the full report for a closer look at the trade figures and what they could mean for South Africa’s economy in the months ahead.

Private Sector Credit Extension (PSCE): August 2026

South Africa’s credit market is showing surprising resilience, with credit demand rising by 7.5% in August 2026 despite renewed interest-rate pressure, elevated inflation and mounting household costs. While mortgage advances continued to grow, the fragile recovery in the property market highlights the strain caused by subdued investment, high debt levels and rising municipal and energy expenses. At the same time, sluggish instalment credit growth and continued reliance on short-term borrowing reveal how consumers are navigating increasingly difficult financial conditions. With higher oil prices, geopolitical risks and further SARB tightening adding to the pressure, this report examines what the latest credit trends reveal about household finances, business confidence and the broader South African economy.