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<\/p>\nWhile global markets struggle to find stability, gold has emerged as the biggest winner in 2016 so far, rising as much as 17% in value since January.<\/p>\n
Gold is currently trading at R19,100 per ounce (over R610,000 a kilogram) – after recently reaching record highs for South Africa (R19,763).<\/p>\n
In US currency however, gold reached its highest point in August 2011, when the commodity traded at around $1,900 an ounce. At the time, however, exchange rates put the price at R12,648 in local currency.<\/p>\n
Gold has since slumped to around $1,230 an ounce – but with the South African rand at some of its highest points against the dollar, the value of gold is at a record high.<\/p>\n
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The recent surge in gold price has commodity fans excited, with the metal gaining as much as 17% in 2016.<\/p>\n
Its strength is reflective of ailing global economic conditions – where China is slowing down, the price of oil is dropping, and Britain is threatening to exit Europe.<\/p>\n
All these conditions – much like the turbulence faced by global markets in 2008 – are pushing people to invest in the metal, which is seen as a safe bet amid economic uncertainty.<\/p>\n
However, economists and analysts, both globally and locally are divided – with many warning that gold’s return to glory may be temporary,\u00a0and even detrimental in the long-run.<\/p>\n
Goldman Sachs revised its 12 month target price of gold to $1,000 an ounce, saying that fear was driving the price hike, and it would not last.<\/p>\n
Other economists estimate that the price could go as high as $1,400 an ounce if global markets do not stabilise – higher if another global recession had to hit.<\/p>\n
Head of Randgold Resources, Mark Bristow, painted a gloomier picture, saying that, if the gold price stays on the lower end of the price spectrum ($1,000) producers would be forced to cut production, as it would become unprofitable to extract the ore.<\/p>\n
About 5 million ounces needed to be cut from global production to keep prices higher than $1,400 in the long-term, he said.<\/p>\n