Gold price set to top US$4 000 by 2026

Financial services firm Inter Horizon Securities (IH) has forecast that gold prices will surpass US$4 000 per ounce by the end of 2026 - a surge analysts say could significantly boost Zimbabwe's economy.

According to IH's latest third-quarter equities strategy report, the global gold price has already surged by more than 40 percent over the past year, largely driven by geopolitical instability and weakening confidence in the United States dollar.

"The gold spot price exceeded US$4 000 per ounce in early October on the back of perennial geopolitical tensions in the Middle East and a government shutdown in the United States, as the US dollar continues to lose value," the report stated.

The firm expects gold to average US$3 400 per ounce in 2025 before climbing above US$4 000 in 2026 - a trend IH says will have "positive implications" for Zimbabwe, where gold currently contributes around 14,5 percent to gross domestic product (GDP).

Zimbabwe's mining sector is projected to expand by 2,9 percent this year, driven largely by strong gold performance despite sluggish activity in platinum group metals (PGMs). "Forward looking, the expectation is that prices for PGMs and base metals are expected to remain depressed whilst gold prices are likely to remain in favourable territory," IH noted.

Gold deliveries to Fidelity Gold Refinery (FGR) rose 37 percent to 32,98 tonnes by the third quarter of this year, while the value of gold exports surged by 98,7 percent to US$3,2 billion compared to the same period last year.

Analysts say the upward trend is being supported by government incentives for artisanal and small-scale miners, including the retention of 100 percent of their foreign currency earnings and a 5 percent bonus for every 500 grammes delivered to FGR.

Market watchers believe these incentives, coupled with favourable global prices, will help Zimbabwe achieve its output target of 43,39 tonnes in 2025, up from 38,45 tonnes last year.

IH said listed gold producers are among the biggest beneficiaries of the rally in bullion prices, while the Reserve Bank of Zimbabwe (RBZ) is also likely to strengthen its import cover on the back of increased export receipts.

"We are of the view that listed companies that primarily produce gold will likely benefit from the global gold run, while simultaneously, the Reserve Bank will continue to improve its import cover," IH stated.

However, the firm cautioned that the volatile nature of the commodity could cause fluctuations in reserve values. "Volatility remains due to the commodity nature of the yellow back, which may cause swings in reserve value," the report warned.