The rand was bid at R14.8048 against the dollar at 5pm yesterday after weakening by 0.31 percent from the previous close of R14.69 against the US dollar.
The gold price price jumped 0.53 percent to $1334.67 an ounce, after hitting a one-week low, helping mining stocks soar.
AngloGold Ashanti’s shares led the rally to close 6.11 percent higher at R225.30, while Sibanye-Stillwater closed 5.27 percent stronger at R15.37 and Gold Fields was 4.67 percent higher at R76.47 a share.
Rene Hochreiter, an analyst at Noah Capital, said that the weaker rand had boosted the fortunes of gold stocks.
“There are more buyers than sellers and the rand is getting weaker again since this morning,” said Hochreiter.
Risk-averse institutional investors have embraced gold over stocks and bonds as US President Donald Trump this week defended the use of tariffs, while China vowed a tough response if Washington insists on escalating trade tensions.
Trump has threatened to slap tariffs on an additional $300 billion (R4.42 trillion) worth of Chinese goods if a deal was not reached at the G20 summit in Japan later this month. He is expected to meet Chinese President Xi Jinping at the G20 summit.
Platinum shares were also stronger, with Anglo American Platinum jumping by 3.78 percent to R804.27 a share, and Impala Platinum rose by 1.9 percent to R67.65 a share.
Rick Levin, a trader and investor Platinumisrare.com, said the weak rand, a function of swirling economic challenges, would lead to much higher platinum group metals prices.
He said in a note that mining houses benefited from a weaker currency and had the benefit of better margins.
“Those better margins, however, will not lead to increased production, in my view, but rather further retrenchment given that the weaker rand is primarily a function of challenging domestic politics.
“With rising fuel costs a direct effect, any borrowing in foreign currency costing more, incremental pressure on Eskom leading to inexorably higher electricity rates, and overall a picture of seemingly intractable problems, South African companies find themselves operating in a challenged state,” he said.
South Africa produces 70 percent of the world’s supply of platinum, which is trading at $813 (R11975) an ounce.
“I continue to feel the platinum group metals are mispriced by multiples of where they are trading today,” Levin said.
The recent comments by ANC secretary-general Ace Magashule over the mandate of the SA Reserve Bank has rattled investors, adding pressure to the local currency.