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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
January 14, 2026

South African

Gold and Foreign Exchange

December 2025

The South African International Liquidity Position, as reflected by Net Gold and Foreign Exchange Reserves, saw an increase in US Dollar terms for December 2025, although there was a slight decline when measured in Rand. This occurred alongside the Rand’s appreciation against the US Dollar from November to December, according to data from the South African Reserve Bank.

Reserves rose by almost USD 1.1 billion, building on a USD 660 million increase in November 2025. The consistently high gold prices significantly supported reserves from August to December, with a 65.3% increase compared to the same period in 2024.

Foreign reserves in USD terms continued to rise in December over the previous month. Meanwhile, the Reserve Bank continued its US Dollar purchases in the open market in December, attributed to a weaker Dollar following the Federal Reserve’s interest rate cut in November 2025.

Key commodities such as gold, oil, platinum, and coal are crucial for understanding South Africa’s mining sector and inflation outlook. Monitoring these trends is essential for assessing inflation prospects, especially in light of ongoing international developments and potential trade restrictions with the US following tariff measures introduced in August 2025.

Observing these trends is critical, as inflation expectations will influence the South African Reserve Bank’s (SARB) interest rate decisions in late January 2026. A stable but stronger Rand, coupled with slightly lower oil prices, supports more favourable inflation forecasts. However, geopolitical uncertainties and possible adjustments to trade agreements, like the African Growth and Opportunity Act (AGOA), could heighten market volatility.

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