South African rand strengthens as gold gains strength, and the coming week will be data-rich

Gold prices rose after China’s central bank resumed buying the metal, while South Africa’s rand surged Monday at the beginning of a week full of economic data releases.

Around 1.2% stronger than its last close, the commodity-driven rand was trading at 17.8050 vs the dollar at 1413 GMT.

“Developments in the Middle East, together with China’s central bank resuming gold purchases after a 6-month hiatus has seen gold prices climb today, playing into the hands of the rand,” Katleho Ntema, a sales trader at IG

Investors with an eye toward South Africa will be examining a number of economic data points this week, such as October mining production (ZAMNG=ECI), manufacturing (ZAMAN=ECI), retail sales numbers (ZARET=ECI), and new tab data on Tuesday and Wednesday, respectively.

Additionally, Statistics South Africa will provide November consumer inflation data (ZACPIY=ECI) on Wednesday, opening a new tab. On Thursday, it will release the same month’s producer inflation figures (ZAPPIY=ECI).

In order to get a sense of the Federal Reserve’s policy stance at its meeting next week, global markets will be watching Wednesday’s U.S. inflation statistics.

“As we expect the rand to extend gains in the short-term, we would practice caution until both US and SA (consumer price index) prints on Wednesday,” Ntema advised.

The Top 40 index (.JTOPI) on the Johannesburg Stock Exchange opened a new tab and was up roughly 0.7%.

The benchmark 2030 South African government bond was more stable, with a yield that dropped 2.5 basis points to 8.91%.