Gold Rally Boosts South African Rand

The USDZAR currency pair has recently captivated the attention of traders worldwide, with back-to-back weeks of losses painting a dynamic picture of market sentiment. Opening the new week with a marginal decline of 31 basis points, the pair’s movements have been influenced by a multitude of factors, notably the surge in gold prices.  

South Africa’s status as a prominent exporter of gold has significantly bolstered the South African Rand, which benefited from the precious metal’s recent ascent to new heights. This surge in gold prices stems from mounting safe-haven demand amidst escalating geopolitical tensions and expectations of a U.S. interest rate cut, highlighting gold’s allure as a hedge against economic uncertainties. Additionally, the Rand received a morning boost from an increase in the nation’s foreign exchange reserves for March, surpassing expectations at $62.32 billion.  

As investors gear up for the week ahead, all eyes are on the United States, where crucial economic data, including March’s inflation figures and the release of the FOMC Minutes, promise to provide vital insights into the Federal Reserve’s monetary policy stance, potentially influencing the trajectory of the USDZAR pair.  


The USDZAR pair finds itself entrenched in a downtrend, as depicted on the daily chart, where it trades below the critical 100-day moving average, signalling sustained downward momentum. Within a descending channel pattern, the pair’s trajectory validates this downward movement, underlining the prevailing bearish sentiment. 

Recent price action saw the emergence of resistance at 18.85659, triggering a sharp decline as selling pressures intensified, sending the pair towards the lower boundary of the descending channel. However, amidst oversold conditions indicated by the Relative Strength Index (RSI), selling pressures decreased, allowing for a brief respite in the form of buying activity. After establishing support at the 18.56879 level, the pair rebounded towards the 61.80% Fibonacci Retracement Golden Ratio. 

Nevertheless, the resilience of sellers became evident at the Golden Ratio, as evidenced by the subsequent decline from this level, affirming it as a robust intermediate resistance level. The USDZAR pair’s trajectory now hinges on the delicate balance between selling pressures and bullish momentum, with sustained downward pressure potentially leading to a retest of the 18.56879 support level. In contrast, renewed bullish sentiment could drive the pair towards a retest of the Golden Ratio. 


In conclusion, the USDZAR pair, influenced by gold’s rally and technical indicators, reflects a delicate interplay between bullish and bearish forces. With key levels at 18.85659 resistance and 18.56879 support, its trajectory hinges on the outcome of crucial U.S. economic data and market sentiment. 

Sources: South African Reserve Bank, Reuters, TradingView 

Piece Written By Nkosilathi Dube, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.

Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.

CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.