Get more Mail & Guardian
Subscribe or Login

South Africans pile into gold coins

Aware that gold is the ultimate store of value, concerned South Africans are piling into Krugerrands and Nelson Mandela gold medallions, the SA Gold Coin Exchange said on Friday.

”On the back of global financial turmoil, the ever-popular Krugerrand has soared through the R10 000 mark, handsomely rewarding investors who several months back anticipated the global financial turmoil that has driven the rand price of the yellow metal into orbit,” Alan Demby, executive chairperson of the SA Gold Coin Exchange, said in a statement.

Technically, the surge could be directly ascribed to a combination of an advancing dollar gold price and a weakening rand.

”Based on current demand levels, the SA Gold Coin Exchange’s sales have been running at levels in excess of R100-million a month. We have accordingly increased our 2009 sales target to an admittedly conservative R1-billion,” said Demby.

Reord stock market lows were translating into record highs for gold and Krugerrands, and Demby suggested that in the last six months, a large number of investors had switched from equities into gold coins.

”The smart money has carefully digested the fact that in the past six months the JSE all-share index has slumped by 30%, while the price of a Krugerrand has soared by 64% over the same period,” he said.

Demby said it had to be remembered that the index was somewhat buffered by ”a firm gold share index”.

He said that British media had been carrying reports on the flight from cash to gold in the wake of concern over the safety of the banking system.

”Here the concern is more over the value of the currency than the banking system. Even so, widespread uncertainty is prompting investors the world over to accumulate gold as the only tried and tested safe haven.”

Looking ahead, he predicted ongoing Krugerrand strength.

”Prospective investors in Krugerrands have not missed the boat. As the global financial crisis deepens, as it is surely bound to do, gold bullion will continue to advance,” he said.

At the same time, South Africa’s inflation differential and the risk perceptions attaching to emerging market economies would probably witness ongoing rand weakness, Demby said. – Sapa

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

Hawkish Reserve Bank sees South Africa edge towards a rates...

Analysts say the Reserve Bank could start tightening monetary policy as early as next month

Coko vs S ruling: The case against a subjective test...

Acting judge Tembeka Ngcukaitobi’s acquittal of a rape suspect has raised controversy, but legal experts say the fault lay with legislators and not the court

More top stories

Hawkish Reserve Bank sees South Africa edge towards a rates...

Analysts say the Reserve Bank could start tightening monetary policy as early as next month

Lucas Radebe: ‘My football career began behind my parents’ back’

Soccer legend Lucas ‘Rhoo’ Radebe is a busy man, but he made time in his hectic schedule to speak to Ntombizodwa Makhoba about his fondest childhood memories, how his soccer career began, and, as a father of eight, his legacy

Coko vs S ruling: The case against a subjective test...

Acting judge Tembeka Ngcukaitobi’s acquittal of a rape suspect has raised controversy, but legal experts say the fault lay with legislators and not the court

Defend journalists and media freedom in Eswatini

Journalists are censored through cruel and illegitimate detention, torture and the removal of means to disseminate information to citizens crying – and dying – for it
Advertising

press releases

Loading latest Press Releases…
×