South Africa’s new gold rush is already over
South Africa’s economy benefited significantly from the rise in gold and platinum prices in 2025, but that rise has now stopped.
Gold prices rose rapidly in 2025 as investors and central banks across the world increasingly purchased the metal following widespread global uncertainty kick-started by US President Donald Trump.
Gold prices started the year at around $2,600 an ounce and breached the $4,000 threshold for the first time in October 2025.
PGM metals have seen a massive rise in prices, which was caused by major supply chain issues in South Africa and questions over the transition to electric vehicles.
The Johannesburg Stock Exchange All Share then saw a near 40% surge in 2025, buoyed by South Africa’s gold and platinum miners, including Harmony Gold and Valterra Platinum.
The high prices also provided the National Treasury with a major fiscal windfall, allowing it to withdraw roughly R20 billion in planned tax hikes in the 2026 National Budget.
Given the rapid rise in prices in 2025 and a high base, the prices for gold and PGMs have started to decline, which has impacted miners.
Speaking to BusinessTech, Morningstar South Africa Head of Investments Sean Neethling said gold and platinum miners are starting to be sold off.
While Harmony Gold and Valterra Platinum have only seen minor drops in their share prices, Gold Fields, Impala Platinum, Sibanye Stillwater and Northam Platinum have seen double-digit declines.
Still signs of life
While the rush to single-commodity miners may be declining, Neethling said that there are still sectors and companies that remain attractive.
He noted that diversified miners on the JSE, including BHP and Anglo American, remain incredibly attractive at current valuation levels.
These miners did not benefit from the major gains seen in 2025 and are fairly priced for Morningstar, with Anglo American priced on the cheap side.
He added that South Africa’s banks are also incredibly attractive, given their incredibly low P/E ratios, with high upside for investors and high dividends on the table.
The low P/Es are primarily linked to the traditional Big Four banks, being Nedbank, Standard Bank, Absa and FirstRand.
Capitec, on the other hand, trades at a much higher multiple of around 33. However, Neethling said that Capitec’s growth outlook remains promising.
Elsewhere, he noted that industrial stocks remain promising, while Naspers is also incredibly cheap.
Naspers, the owner of Takealot and, most importantly, a shareholder of Tencent, is pegged to China and offers an attractive price, especially as an offshore rand hedge.
However, Neethling admitted that these stocks are primarily attractive for rand-based buyers, who are essentially forced buyers of JSE stocks.
For international investors with a far wider universe of investment options, South Africa is less attractive than other emerging markets.
He said that South Africa competes with an incredibly cheap Chinese market, as well as Taiwan and South Korea, which have benefited from technology investments.
Neethling added that South Africa is also not benefiting from a market that increasingly prioritises technology investments.
Even if there were a rise in risk-on sentiment across global markets, South Africa would remain less attractive than other markets due to limited exposure to AI and technology.
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