Gold broke through $3,500 (about R61,500) an ounce for the first time and briefly touched $3,600 (about R63,200) an ounce. This milestone was reached after U.S. figures showed only 22,000 jobs were created in August, while unemployment climbed to 4.3%. The weaker labour market pushed the dollar to a new low, leading many investors to turn to safe-haven assets such as gold.

The rally in gold immediately benefited South African mining companies. DRDGOLD rose 19.3% to R36.99 after reporting a 26% increase in revenue and announcing that it would double its dividend. Sibanye Stillwater gained 17.2% to R37.80, supported by cost-cutting measures and slightly firmer platinum group metal (PGM) prices. The JSE’s Mining Index advanced 5.3% over the week, showing how gold continues to provide stability in a sector that has faced weaker demand for other commodities.

However, not all mining companies share the positive momentum. African Rainbow Minerals reported a 47% drop in profit and confirmed that it would suspend its Bokoni platinum mine. This decision highlighted the continued difficulties facing the platinum industry, even as gold shines on international markets.

The broader Johannesburg Stock Exchange (JSE) was less upbeat. The All-Share Index slipped 0.3% to 101,532.30 by the end of the week. Bidvest fell 10.6% as higher input costs and weaker volumes weighed on earnings. Sanlam declined 8.9% after releasing results that showed softer life insurance sales, although its investment business performed well. These results pointed to a mixed environment for companies outside of mining.

Currency markets also reflected global shifts. The rand strengthened modestly, gaining 0.4% to R17.57/$, 0.38% to R23.73/£, and 0.19% to R20.58/€. Analysts linked this to the weaker dollar, higher commodity prices, and stronger demand for gold-related assets. The local currency has been under pressure for much of the year, so the improvement was a welcome development.

Domestic economic indicators presented a mixed picture. The Absa manufacturing PMI slipped to 49.5 in August, falling below the 50-point mark that separates growth from contraction. This signalled weaker demand and pressure on local manufacturers. On the positive side, new car sales jumped 22.5% year-on-year, the highest monthly total since 2019. Improved stock availability and easier credit supported the recovery in vehicle sales.

Several important policy developments also made headlines. Eskom confirmed a R54 billion settlement with energy regulator Nersa over past tariff miscalculations. As part of the settlement, electricity tariffs will increase by 3.4% in 2026/27 and 2.64% in 2027/28. At the same time, the government approved Transnet’s plan to open 41 rail routes to private operators. This reform is expected to increase freight volumes and attract new investment in the country’s logistics sector over the next few years.

Global developments also shaped investor sentiment. In Europe, inflation edged up to 2.1%, leading the European Central Bank to keep a cautious outlook. OPEC+ announced that it would increase oil supply by 137,000 barrels per day in October, which could ease some pressure on global fuel prices. In Asia, Chinese services activity rose to its highest level in 15 months, although weak export numbers continued to signal pressure on the world’s second-largest economy.

Source: Information adapted from Everest Wealth’s weekly economic report