Rand gains as gold shines and investors eye year's final economic data

The South African rand gained in early trade on Monday, 15 December, supported by higher gold prices as local investors look towards the year's last bit of economic data for clues on the health of Africa's most industrialised economy.

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At 7.01 GMT, the rand traded at 16.84 against the dollar, about 0.2% firmer than its previous close.

Gold held near a more than seven-week high on Monday, 15 December, on a weaker dollar and lower US yields, and as a major producer of precious metals, South Africa often benefits from firmer bullion prices.

"Through the past week, the Zar was able to capitalise on weaker USD sentiment. As the USD remained in a weaker trend, the Zar was able to sustain the break below 16.90/dlr and open the door for even more Zar appreciation," ETM Analytics said in a research note.

"Technically speaking, the Zar could now test levels in the 16.60s before the end of the year, which would play a significant role in reinforcing the virtuous cycle that has resulted in the Zar appreciating as much as it has this year," ETM Analytics said.

Domestically-focused traders will examine the South African Reserve Bank's bulletin for the third quarter, which is expected to be released at 8 GMT, offering insight into quarterly foreign direct investment and portfolio flows.

Later in the week, investors will look to November consumer inflation data and producer inflation figures.

South Africa's benchmark 2035 government bond was firmer in early deals, as the yield fell five basis points to 8.39%.