The rand's resilience: Can gold prices offset risks from the Iran conflict?

THE rand faces neutral to weaker risks of impact from the US and Israel war in Iran, said analysts at BMI, highlighting though that higher gold prices are poised to offer some sort of support to offset the full impact of rising energy import costs.

- TAWANDA KAROMBO

The war in Iran has disrupted trade and shipping routes, pushing up oil and gas prices for South Africa and other regional and international markets that are reliant on imports of these commodities. Further escalation into a prolonged geopolitical conflict could have an impact on Sub-Saharan African countries although the impact was likely to be uneven.

The analysts BMI, a Fitch Solutions company, said the balance of risks of the war in Iran on the rand would be "neutral to weaker". nonetheless, oil exporters such as Nigeria, and to a lesser extent Angola would likely benefit from higher crude prices.

"Net importers such as Kenya and South Africa would face depreciatory pressures driven by weaker terms of trade and risk off sentiment," said BMI.