Precious metals prices corrected sharply this week amid market optimism about easing trade tensions between China and the US, as well as traders locking in profits following months of strong gains. Gold, silver, platinum, and palladium saw steep losses early in the week before stabilising by Thursday and dipping again on Friday in a week of volatile trade.
Gold, which shattered the $4,000 per ounce mark earlier this month, plunged by 6% on Tuesday, its biggest daily loss in 12 years. Silver, palladium, and platinum prices also plummeted. The rout coincided with a rebound in the US dollar, while the S&P 500 continued to trade near record levels in a risk-on environment.
By Thursday, precious metals had trimmed some of their losses. Renewed concerns over global trade frictions and the prospects of US rate cuts helped these metals recover some ground. Geopolitical tensions, including the imposition of tougher sanctions on Russia, also supported demand for safe-haven assets.
Most analysts see the correction in precious metals prices as inevitable and healthy, given how dramatically prices have climbed this year. Even after the correction, platinum is up nearly 77% year-to-date, gold up 55%, silver up nearly 67%, while palladium has gained around 55%.
The price of gold has more than doubled since Russia’s invasion of Ukraine in 2022, partly fuelled by geopolitical uncertainty and the post-pandemic inflationary environment. Central banks in many parts of the world have ramped up bullion purchases over concerns around the debasement and political weaponisation of the US dollar.
These trends remain firmly in play, and US President Donald Trump’s antagonistic approach to trade and hostility to the US Federal Reserve give central banks even more reason to continue diversifying from the US dollar. Indeed, Trump capped the week by once again threatening to walk away from trade talks with Canada.
In this volatile environment, market participants say longer-term investors, or the “strong hands” of the central banks, will most likely remain committed to gold. However, some of the “weaker hands,” the institutional and retail investors, may well continue to take profits off the table.
The pullback in metals prices has not had a dramatic effect on the rand, with the currency flat against the dollar for the week at the time of writing. The JSE is also only slightly down for the week, losing 0.8% with the Precious Metals and Mining Index down 15.5% since last Thursday’s all-time high. However, this is a timely warning that the current rally in South African equities remains exposed to corrections in metal prices.
Over the short term, the pricing of precious metals is likely to be choppy. But economists at firms such as JPMorgan and Morgan Stanley this week reiterated their bullish long-term outlook for gold, citing persistent structural diversification away from the dollar, sustained central bank buying, and a backdrop of geopolitical uncertainty. Thus, for now, the macroeconomic and geopolitical trends supporting precious metal prices are still in play.
However, if the US dollar strengthens, the trade environment settles, or the Fed holds interest rates steady amid concerns about inflation, the momentum of precious metals prices may stall.
“Investors are watching gold not just as a hedge against inflation, but as a barometer for everything from central bank policy to geopolitical risk.” – Amy Gower, Morgan Stanley Metals & Mining Commodity Strategist.
“Significant moves in the gold price are fascinating from a behavioural perspective because gold is probably the perfect belief asset – that is an asset which is impossible to value in any reasonable way so it’s worth is entirely dependent on what we think other people believe it to be.” – Joe Wiggins, Investment Research Director at SJP.
Global News
- After briefly soaring to well above $4,300 an ounce, gold prices suffered a sharp reversal this week, but long-term investors remain unfazed, viewing the pullback as temporary. The selloff came as traders locked in profits following weeks of record highs driven by US-China trade tensions, expectations of Fed rate cuts, and surging safe-haven demand. Despite the correction, fund managers and retail investors interviewed by Bloomberg say structural drivers remain intact, including central bank buying, tight supply, and lingering geopolitical uncertainty. Many gold bulls argue the rally is merely pausing before the next leg higher, citing parallels with past consolidation phases that preceded sustained gains in the precious metals cycle.
- On Wednesday, spot platinum prices recovered 6.4%, reaching $1,646.03 an ounce, the metal’s largest intraday gain since 2020, as traders grappled with both a sharp uptick in demand and mounting squeeze fears in the market. The surge followed earlier volatility in silver and gold, and sources suggested the rally was driven by tightening supply, including shrinking global recycling, and a rotation of investor interest toward platinum amid gold’s already elevated levels.
- The Fed is expected to cut its key interest rate by 25bps next week and again in December, according to a Reuters poll of 117 economists. The wire service said on Tuesday that this reflected a shift from forecasts a month ago of only one more reduction this year. The Fed last cut rates by 25bps in September, its first move since December 2024, prioritising a weakening labour market over inflation risks. The ongoing government shutdown is delaying employment and inflation data, clouding the outlook.
- The US government shutdown entered its 24th day on Friday, becoming the second-longest in history, as negotiations between the White House and Congress remain deadlocked over budget funding and health care subsidy policy. Trump’s refusal to approve spending without significant program cuts has halted large parts of the federal government, delaying economic data releases and heightening risks for millions of Americans reliant on food assistance. The shutdown has also furloughed hundreds of thousands of federal workers and is adding to economic uncertainty, with analysts warning that a prolonged impasse could erode consumer confidence and weigh on fourth-quarter GDP growth. The longest historic shutdown was a 35-day halt from the end of 1995 to the start of 1996.
- Despite growing concern that US equities are nearing dot-com-era highs, Stephen Jen, founding partner and co-CEO of Eurizon SLJ Asset Management, writes that valuations remain well below the speculative extremes of 2000, suggesting the AI-driven rally still has room to run. Since 2011, US stocks have risen sevenfold, led by a 16-fold surge in tech, while the “Magnificent Seven” are up about 300% since late 2022. Jen says strong earnings, cash flows, and institutional depth support these companies. Though a correction is possible, it would likely be shallower and less disruptive than the 2000 crash, given solid balance sheets and sustained AI investment.
- Trump and Australian PM Anthony Albanese signed a landmark agreement during their meeting on Monday to enhance US access to critical minerals, with both the US and Australia committing more than $1 billion each over six months toward projects in Australia worth up to $8.5 billion aimed at reducing dependence on China’s rare-earth supply dominance. The pact includes joint investments in mining and processing of key minerals for defence and technology sectors, a proposed price-floor mechanism for strategic metals, and increased focus on expanding Australia’s heavy rare-earth refining capacity.
- Canada’s PM, Mark Carney, on Wednesday announced a plan to double Canada’s exports to markets outside the US within ten years, targeting an additional $214 billion in trade. In a rare prime-time address ahead of the 4 November budget, Carney said Canada must reduce its dependence on the US, which buys about 75% of its exports. He warned that tariffs imposed by Trump are costing jobs in key sectors such as autos, steel, and lumber, adding that uncertainty over trade has caused businesses to delay investment. This comes as Trump said this morning he was ending trade negotiations with the country.
- China overtook the US as Germany’s largest trading partner in the first eight months of 2025, as higher tariffs weighed on German exports to the US, preliminary data from the German statistics office showed. Trade with China totalled $190.7 billion, 0.3% higher than that with the US, according to Reuters calculations. Exports to the US fell 7.4% in January to August, with August shipments down 23.5% year on year, reflecting accelerating tariff pressures.
- Internal documents and interviews reviewed by The New York Times show Amazon.com executives anticipate replacing more than 500,000 jobs with robots in the coming years. The company’s automation team projects that by 2027, it could avoid hiring over 160,000 US workers, saving roughly 30c per item picked, packed, and delivered. Executives told the board that robotic automation could prevent workforce growth even as sales double by 2033.
- Anthropic and Google announced a cloud-computing partnership yesterday, expected to be worth tens of billions of dollars. The potential arrangement would grant Anthropic access to Google’s tensor processing units and other cloud infrastructure to train its advanced AI models. While the deal remains tentative, the talks send a strong signal about the escalating demand for AI-specific computing power and Google’s ambition to capture a larger share of the AI cloud services market.
- Tesla’s profit tumbled despite a record quarter in vehicle sales, as rising costs strained operations. On Wednesday, as the results were released, CEO Elon Musk highlighted the company’s humanoid robot and AI initiatives. Musk also urged support for his $1 trillion pay plan, offering few details on reviving Tesla’s core EV business after a 40% drop in operating profit. Tesla’s adjusted earnings fell 31% year-on-year, missing the Bloomberg analyst consensus. The shares dropped 3.8% in extended trading in New York before rebounding 2% yesterday.
- General Motors raised its 2025 profit outlook, citing lower tariff pressures and smaller losses on electric vehicles as it scales back earlier EV bets. The company’s stock jumped 15% on Tuesday, its biggest single-day gain in nearly six years, after strong third-quarter results and positive signals for 2026. CEO Mary Barra said near-term EV adoption will be lower than planned, but steps to address overcapacity are expected to cut EV losses in 2026 and beyond. GM wrote down its EV investment by $1.6 billion earlier this month. It is set to introduce hands-free driving and the freedom to watch a movie while on the go.
- Novo Nordisk shares fell about 3% on Wednesday after its largest shareholder, the Novo Nordisk Foundation, proposed a major board overhaul that would see Chairman Helge Lund and six independent directors step down next month. The foundation plans to appoint former CEO Lars Rebien Sørensen as chair for up to three years and add six new members in what analysts called a “structural governance reset” aimed at boosting US market expansion and deal-making. The move comes amid a 45% drop in the stock this year and growing tensions between the board and shareholders over strategy and the pace of change.
- As at Thursday’s close the S&P 500 was 1.12% up for the week.
Local News
- Markets are optimistic that the Financial Action Task Force (FATF) will remove South Africa from its “grey list” at the conclusion of its plenary in Paris today. Analysts say the country has addressed all 22 corrective actions required, with the final measures now subject to an onsite assessment by the FATF Africa Joint Group. Exiting the list could boost investor confidence, reduce transaction costs, and remove barriers to correspondent-banking relationships. However, experts caution that it is only one of several factors influencing foreign capital inflows.
- Eskom on Wednesday announced a 12% average increase in electricity tariffs from 1 November 2025, alongside its mandatory smart meter rollout. Meanwhile, Parliament wants complete transparency on the R5.7 billion smart meter project, it said on Tuesday. This includes procurement, suppliers, and empowerment plans. Eskom plans to install 577,000 of 6.2 million meters by March 2026. Senior executive Collin Reddy said the rollout is part of the utility’s digital transformation to reduce non-technical losses, such as illegal connections, which cost 14.7 TWh – over R30 billion in revenue last year.
- Annual inflation accelerated to 3.4% in September from 3.3% in August, moving further from the central bank’s 3% target, Statistics South Africa said on Wednesday. Price rises were broad-based, notably in transport, restaurants, and accommodation. The pickup reduces the likelihood of an interest-rate cut when the monetary policy committee meets on 20 November, Bloomberg Economics Africa Economist Yvonne Mhango said. Forward rate agreements still price a 60% chance of a cut later this year, while the rand erased gains.
- Yet, South African Reserve Bank Governor Lesetja Kganyago said yesterday he was determined to lower inflation to a 3% target, down from the current 3% to 6% target. He argued that achieving this level would reduce South Africa’s country-risk premium, lower borrowing costs, and foster a “virtuous circle” of improved fiscal dynamics, lower interest rates, and strengthen growth. Kganyago stressed the need for monetary and fiscal policy alignment, noting that a permanent shift to a lower inflation target requires credible debt and spending plans, as well as structural reforms to support productivity.
- International Relations Minister Ronald Lamola said on Tuesday that South Africa is unlikely to make concessions on domestic policies in ongoing trade talks with the US. Speaking in London, Lamola said negotiations over tariffs and the future of the African Growth and Opportunity Act (AGOA) are progressing positively. This follows Massad Boulos, US senior adviser for Africa, telling Bloomberg in an interview on Monday that progress was being made towards renewing AGOA. Congress has been given until the end of the year to decide whether to renew the pact.
- US tariffs on South African exports could cut 0.4 percentage points from GDP and cost 22,000 to 40,000 jobs, the South African Reserve Bank warned in its October Monetary Policy Review released yesterday. The tariffs, applied from 7 August, cover nearly two-thirds of South Africa’s exports to its third-largest trading partner, with duties of around 25% on vehicles, 30% on agricultural products, and up to 50% on aluminium and copper. Key vulnerable sectors include automotive manufacturing and agriculture, where the loss of preferential access under AGOA has raised concerns about commercial viability and broader spill-over effects in rural communities.
- The DA has proposed an “economic inclusion for all” Bill to replace the ANC’s Black Economic Empowerment policy with poverty-focused empowerment, targeting tangible outcomes. The Bill seeks to align public procurement with constitutional principles of fairness, transparency, and cost-effectiveness, in line with the UN Sustainable Development Goals. DA leaders stress the Bill’s distinct identity, rejecting race-based policies, aiming for economic production, and criticising the ANC’s alleged focus on benefiting the politically connected.
- Industry leaders have welcomed the Integrated Resource Plan (IRP) 2025 for acknowledging the vital role of gas in South Africa’s future energy mix, but warn it lacks a credible roadmap to secure long-term supply and infrastructure. The plan, unveiled by Electricity Minister Kgosientsho Ramokgopa, forecasts gas will account for 11% of electricity generation by 2039, up from minimal levels today. Jaco Human, CEO of the Industrial Gas Users Association of Southern Africa, said the IRP rightly recognises gas as a versatile and transitional energy source, but cautioned that without a clear supply and investment strategy, growing dependence on imports could pose a significant economic risk.
- Gold’s record prices, up more than 50% in under ten months, have allowed South Africa’s major JSE-listed gold miners to slash debt and accelerate growth plans. The precious metals index has surged by more than 140%, pushing the combined market capitalisation of key producers above R1.5 trillion. Companies such as Gold Fields, AngloGold Ashanti, and Harmony Gold have used the rally to strengthen balance sheets and fund expansion, with AngloGold’s debt down 92% year-on-year. Analysts say the boom, driven by robust safe-haven demand, high prices, and improved operational efficiency, marks a rare resurgence for a sector that has struggled with years of underinvestment and rising costs.
- Automakers are accelerating electric vehicle strategies as demand for new energy vehicles (NEV) grows. Local producers are adapting to the global shift away from internal combustion engines by investing in EV production capacity. Increased demand is supported by government incentives, more affordable NEVs, and expanding charging infrastructure. Toyota, BMW, Chery, and Stellantis told ITWeb this week that, while EVs are not mainstream locally, the industry is positioned for future growth as policies and incentives for EV ownership and manufacturing improve.
- Sasol shares surged 17.3% yesterday, their biggest one-day jump in nearly four years, adding billions to its market value. The rally followed a positive trading update showing the company is on track to meet its 2026 growth targets and came as the US imposed sanctions on Russia’s Rosneft and Lukoil. The sanctions are expected to disrupt global supply chains and tighten crude supplies, driving oil prices higher. The combination of stronger fundamentals and rising oil prices is fuelling Sasol’s best performance since March 2021.
- Switzerland-based Coca-Cola HBC says the planned 75% acquisition of Coca-Cola Beverages Africa, which includes South Africa, is aimed at encouraging growth and won’t affect jobs. The London- and Athens-listed group, valued at almost R300 billion, has announced an almost R60 billion deal that could lead to a secondary listing on the JSE. The combined group will operate in numerous European and African countries, including locally, where it is willing to invest.
- Clicks plans to open about 50 new stores and 50 pharmacies in the next year as it accelerates its healthcare and pharmacy expansion despite weak economic growth and rising competition. CEO Bertina Engelbrecht told BusinessLIVE yesterday that demand for convenient healthcare access remains strong, and said the retailer is confident in its rollout strategy even with the risk of self-cannibalisation. “Customers want a Clicks store closer to where they are,” she said, noting that sales typically increase at both new and existing sites.
- As at the time of writing, the rand was flat against the dollar, and the ALSI was 0.8% down for the week.
Sources: Reuters, Bloomberg, ITWeb, BusinessLIVE, WSJ, Daily Investor, Business Report, NYT, News24, Engineering News, CNN, etc.
