Hold on to Krugers

REASON: THE PRICE HAS MORE THAN DOUBLED AND IS STILL ON THE RISE

- Adriaan Kruger

The gold price has more than doubled in rand terms since the middle of 2021, increasing from R25,000 per ounce to nearly R60,000.

The drivers behind this strong rise? The strong increase in the international gold price from $1,800 per ounce to above $3,100, while the rand weakened from a best of R13.35 per dollar in June 2021 to worse than R18.30.

The temptation to sell those gleaming Krugerrands hidden in the bottom of the piano has also increased. A coin bought for R27,000 a few years ago will fetch more than R60,000 today, but it might be better to hang on longer.

Analysts are expecting the gold price to go much higher.

Only a year ago, bulls who predicted a gold price of $3,000 were laughed at - yet the gold price hit a new record of $3,135 per ounce this week.

Gold has increased by nearly 20% since the beginning of the year.

Gold price predictions have been increasing and $3,500 per ounce is suddenly feasible.

"Extreme tail" scenario?

Goldman Sachs noted in a recent research that gold could increase to $4,500 per ounce within 12 months, given "a hypothetical extreme tail scenario".

Bank of America increased its average gold price estimate for this year to above $3,100 per ounce, compared with a previous estimate of an average $2,750 per ounce for the year.