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Gold stocks led gains on the JSE on Friday as bullion climbed to a seven-week high, with the precious metal extending its run over the past week.Gold rose 2.4% on Friday to $4,341.94/oz, taking its gains over the past week to 7.4%. The rally lifted sentiment towards gold counters, with AngloGold Ashanti rising 9.7%, Gold Fields climbing 8.8%, Harmony Gold gaining 7.3% and Sibanye-Stillwater advancing 6.9%.The JSE’s all-share index closed up 1.9% at 117,518 points on Friday.Gold was slightly weaker on international markets on Monday, while the JSE was closed for the Women’s Day public holiday.The stronger gold price was supported by robust central bank demand, particularly from China, while softer US economic data added to expectations of lower interest rates.Weaker-than-expected US nonfarm payrolls data has strengthened expectations that the Federal Reserve could cut interest rates. The prospect of lower rates has pushed bond yields down and weighed on the dollar, making gold relatively more attractive to investors.Meanwhile, hopes of a de-escalation in the Middle East have eased inflation concerns and supported gold’s move above $4,000/oz after weeks of consolidation. US President Donald Trump has also said he expects the war with Iran to end soon, adding to expectations of lower energy prices and inflation.Despite the recent rally, gold has had a volatile start to the year, surging to record highs above $5,500/oz in January before retreating sharply. The recent recovery has once again pushed the metal above $4,300/oz.For South Africa, the stronger gold price is supporting the country’s terms of trade and helping cushion the economy from higher energy costs stemming from geopolitical tensions between the US and Iran.TreasuryONE expects traders to remain cautious, with many likely to hold on to long US dollar positions until there is greater clarity on the Federal Reserve’s policy outlook, it said in a note.Businesss Day
