The gold price in South African Rands:
Tracking the gold rate in South Africa
Gold mining in South Africa can be divided into four phases:
The first stage covers the period from first discovery in the 1880s to the Union of South Africa in 1910. The period is marked by rapid growth in gold mining activities, both in the area around Barberton as well as the Witwatersrand, and interrupted only by the Anglo Boer War from 1899-1902.
The second phase, from 1911 to 1950, is characterised by slowing growth rate, largely due to the outbreak of the First World War, the Rand Rebellion in 1922, the effects of the Great Depression in the late 1920s, and finally the Second World War. Gold production in this phase peaked at approximately 450 tonnes in 1941.
During the third phase, South Africa’s gold production grew remarkably, from 400 tonnes in 1951 to 950 tonnes in 1965, through new goldfields in Carletonville, Klerksdorp, the Free State and Evander areas becoming operational.
Apart from the period 1966 – 1970, the fourth phase is characterised by a general decline in mining production, from 1 000 tonnes of gold mines in 1970, to just over 100 tonnes mined in 2019.
What affects the price of gold?
There are many factors that have an impact on the performance of gold. Gold typically performs better in times of increased perceived stock market risk as a safe haven investment. Geo-political and economic events can all have a severe impact on the price of gold, and currently, recent events such as U.S./China trade wars, Brexit and the U.S general election have been seen as significant contributors to gold’s performance in the recent past.
And while gold has been impacted negatively by the coronavirus pandemic, it was not as dramatically impacted as other precious metal commodities, such as palladium, which fell from $2 877.70/oz. on 27 February 2020 to $1 611.70/oz. a little over two weeks later.
In South Africa, the price of gold can also be significantly impacted by the exchange rate between the South African Rand and United States Dollar.
How has gold performed over the last 20 years?
Gold has performed remarkably over the last 20 years, having increased in value by over 450% since 2000, where it traded around the $320/oz. mark.
Beginning in 2000 in the wake of the ‘dot-com crash’ of internet-related company stock, up until registering its highest spot-price to date of $1 928 in 2011, gold experienced a tremendous, near-perfect run, interrupted only by the 2007-2008 financial crisis.
After falling to a low of $1 062.63 on December 14, 2015, gold has steadily been reclaiming ground lost over the previous four years, and in the last 18 months, there’s been 3 notable rallies:
- August 13 2018 – February 18 2019, where it gained $146.74/oz.
- April 22 2019 – August 26 2019, gaining $254.21/oz.
- November 11, 2019 – March 9 2020, where the precious metal gained $224.25/oz.
Analysts suggest that the $2 000/oz. may yet be breached in 2020 as gold’s value as a safe haven commodity becomes a sought-after investment attribute.
Read more about investing in gold in 2020.
Gold Stats in South Africa
- In 2019, South Africa produced 101.3 tonnes of gold, down from 117 tonnes in 2018
- South Africa is now the world’s 10th largest producer of gold. It is the 2nd largest producer of gold in Africa, after Ghana (since 2019). South Africa produces 4.2% of the world’s annual gold output.
- Gold sales from South Africa’s mines were valued at R72.6 billion in 2019
- South Africa is home to the world’s deepest mines, including Mponeng (near Johannesburg) and Driefontein mines, which have a vertical depth of nearly 4 000 m
- The first gold discovery in South Africa was alluvial gold, found in the Barberton area in the 1880s.
- There are currently 28 operational gold mines in South Africa, and an additional 58 mining projects in various phases of development
- The Witwatersrand basin is the world’s largest gold resource
The current gold rate of production in South Africa
South Africa produced 101.3 tonnes of gold in 2019, down from 117 tonnes in 2018. South Africa’s gold output reached a peak in 1970, where over 1 000 tonnes of gold were produced to render the country the world’s #1 producer of the yellow metal.
Frequently asked questions:
What is the price of gold in South Africa?
The current spot price of gold in South Africa is R28 115.25/oz. Gold began the year at R21 238.20, up from R18 417.80 a year earlier. The price of gold in South Africa is also heavily impacted by the fluctuating Rand / Dollar exchange rate.
What is the highest price of gold in history?
The highest price of gold ever was on September 6, 2011, when it briefly touched $1 928/oz. Gold’s recent high of $1 675/oz., breached on March 6, 2020, was the precious metal’s highest trading value since February 11, 2013 – a price high of over 7 years.
Is gold cheap in South Africa?
Even after decades of gold mining in South Africa, there are still gold projects where it is mined cheaply. At Pan African Resources’ tailings retreatment plants, Barberton and Elikhulu, gold is mined at all-in sustaining costs of just $643/oz. and $708/oz. respectively.