Africa-Press – South-Africa. After hitting a four-year low and breaking through the R16/USD threshold, South Africa’s rand has weakened on the back of a stronger dollar and falling gold price.
The rand’s strength in 2026 and for much of 2025 has largely been attributed to a weaker US dollar and an ongoing commodity rally, particularly in precious metals.
However, both of these factors boosting the rand’s value have now turned, which has seen the local currency weaken back to above R16/USD.
On Monday, 26 January 2026, the rand broke through the R16/USD threshold and continued trading below that level for most of the week.
The local currency strengthened to as much as R15.64 against the US dollar on Thursday, 29 January.
However, the rand started to weaken on Friday, 30 January, and by the morning of Monday, 2 February 2026, the United States dollar was trading around 0.3% higher against the rand at R16.19.
TreasuryONE currency strategist Andre Cilliers attributed the rand’s weakening to a firmer dollar and a softer gold price.
He said the stronger dollar comes as investors analysed what a Federal Reserve under US President Donald Trump’s pick for new Federal Reserve chair, Kevin Warsh, might look like.
“The pick for Warsh by President Trump sent metals plummeting, while the dollar clawed back some of its losses,” he explained.
The gold price went from a record high of around $5,500 per ounce on 28 January to about $4,600/oz on the morning of Monday, 2 February.
“While Warsh would be inclined to cut rates, investors expect him to focus on a smaller Fed balance sheet, reducing money supply in the market, and supporting the dollar,” Cilliers explained.
“Markets are forecasting two further rate cuts this year, depending on upcoming labour and inflation data.”
This saw the rand retreat sharply against the stronger dollar, in line with other emerging-market and commodity-based currencies.
He said the local currency, which fell by 2.5% on Friday, to close at R16.12, has opened even softer at R16.24 on Monday morning as gold prices dropped a further 5.0%.
Driven by uncertainty
The rand has benefitted immensely from heightened uncertainty over the past year, which has boosted gold prices and resulted in a weaker dollar.
Normally, in times of heightened uncertainty, investors would flock to gold and dollar-denominated assets such as US Treasury bonds.
However, this has not been the case over the past year, as the United States, particularly the Trump administration, has been responsible for much of the elevated uncertainty.
This, combined with geopolitical tensions and concerns about the US economy, led investors to show a clear preference for gold and other precious metals as safe-haven assets, while disregarding American assets.
This, in turn, benefited the rand and other emerging-market and commodity-based currencies, with South Africa’s currency reaching levels last seen in 2022.
However, the tide appears to have turned over the past few days, as the dollar strengthened and the gold price is down from record highs.
While it is still early days, there are some signs that this could be the beginning of the end for the rand’s notable strength against the US dollar.
South African mining giant Sibanye-Stillwater noted in a recent strategy update that it expects the gold price to nearly halve from current levels in 2026, at around $2,506 per ounce.
In addition, the miner expects the rand to average around R18/USD in 2026, significantly weaker than where the currency started this year.
Another sign of potentially sustained weakness is that the rand has not only weakened against the US dollar over the past few days, with the euro and British pound also having gained against the local currency.
For More News And Analysis About South-Africa Follow Africa-Press
