Rand back at R6/$ on gold run
Johannesburg - The rand inched firmer on Wednesday, supported by the gold price's surge to a new 25-year peak, but traders said failure to break through the key R5.95/$-level could see the unit weaken during the session.
At 06:40 GMT the rand was trading at R6.00/$ after firming to R6.0275 in overnight trade.
"Initially, we saw some selling of dollars against the rand. 5.95/dollar is a key level and only a break of that will see the rand going down (firmer). Until that happens, I prefer rand weakness," said a trader at a major domestic bank.
The rand has gained 5.2% against the dollar so far this year, driven in part by a rally precious metal prices, but the R5.95/$-level has persistently held.
In Tuesday's Johannesburg session the local currency struggled to follow a stronger euro amid speculation that traders were wary of capital outflows after cellphone operator MTN announced it had agreed to pay $5.53bn for Dubai-based Investcom.
Speculation is rife that the foreign exchange component of the transaction may have been concluded last week, when the rand slipped to a 4-week low of R6.1830/$.
Gold soars
Gold hit a new 25-year high on Wednesday as fund buying persisted, driven by a weak dollar, strong oil prices and concerns about Iran's nuclear ambitions.
Spot gold rose as high as $669.30 an ounce before retreating to $668.90/669.90, still up from $666.20/667.20 late in New York on Tuesday.
Platinum rose to a record $1 176 before easing to $1 175 an ounce. The metal was last quoted at $1 174 an ounce in New York. South Africa is the world's largest producer of both gold and platinum.
The dollar inched down, hovering near recent lows against the euro and the yen, having failed to extend gains on renewed speculation about further US interest rate rises.
The euro was firmer at $1.2663, having climbed as far as $1.2667 in New York, and remained close to Monday's one-year peak at $1.2690.
South African government bonds edged firmer with the rand and in line with a recovery in US Treasuries overnight.
The yield on the most-traded R153 bond due 2010 dipped 2 basis points to 7.175%. The yield on the benchmark R157 bond due 2015 was flat at 7.405%.
Posted by: www.SouthAfrica-CarHire.com
