I think it's a common misconception that gold and the rand trade together. Right now what's happening is that traders who were borrowing yen at .25/.5 pa and leveraging into higher yielding currencies (aud, nzd, rand), gold and international markets, notebaly China, are/were unwinding their positions. This meant that we had a line of causation going like this. China down = stronger yen = selling gold/high yeilding currencies & weaker global markets. Right now the same market forces are affecting both gold and the rand (and aud for that matter). The correlation between a strong yen and a weak rand and gold price is very high. But it is just temporary. It is the cause of other market factors. Gold forms a much smaller part of our exports than what most people realise. And yes they are both denominated in usd, so that also keeps them in line. The rand/gold relationship will change in the future and then people will ask why aren't they moving together. Gold and the rand are affected by two opposing fundamental forces. Gold is a safe haven while the rand is a emerging market currency, kinda the opposite of a safe haven.
... View more