The South African rand strengthened in early trading on Friday, supported by rising gold prices despite heightened geopolitical tensions linked to the Middle East conflict.
At 0745 GMT, the rand traded at 16.5625 against the U.S. dollar, about 0.5 percent stronger than its previous close.
Analysts said the currency gained support from the surge in gold prices, which climbed back above US$5,100 per ounce, boosting sentiment toward the commodity-linked currency.
Gold remains a key export for South Africa and movements in the precious metal’s price often influence the performance of the rand.
Other major exports, including platinum, also posted gains on global markets, providing additional support for the currency.
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According to economist Sifiso Skenjana of ESG Analytics, stronger demand for gold has helped drive the rand’s recovery in recent trading sessions.
He added that disruptions to global shipping routes caused by the effective closure of the Strait of Hormuz could also have indirect economic benefits for South Africa.
“Some ships may need to be rerouted via Cape Agulhas, which could lift South Africa’s port-related revenues, one of the factors the market appears to be pricing into the currency,” Skenjana said.
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The Strait of Hormuz is a critical maritime chokepoint for global energy shipments, and disruptions there can force vessels to seek alternative routes, potentially increasing traffic around the southern tip of Africa.
In the domestic bond market, South Africa’s benchmark 2035 government bond was largely unchanged in early trading.
The yield on the bond edged three basis points higher to 8.27 percent, reflecting cautious sentiment among investors as global markets react to geopolitical risks.
Market participants are also turning their attention to upcoming economic data that could offer insights into the health of Africa’s most industrialised economy.
Next week, investors will watch releases from Statistics South Africa, including gross domestic product figures, as well as mining and manufacturing output data.
The indicators are expected to provide fresh clues about economic momentum in sectors that play a central role in South Africa’s growth and export earnings.
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Analysts say the rand will likely remain sensitive to developments in global commodity markets and geopolitical tensions in the coming days, as investors weigh the impact of rising energy prices and supply disruptions on emerging market currencies.
