• International gold prices reached a new record high of US$2,473 per ounce
• Gold prices have increased by 19.67% or $405.63/t oz. since the beginning of 2024.
• Zimbabwe's gold producers have an opportunity to leverage the high gold prices, but face challenges such as controversial policies and high operating costs

Harare- International gold prices have risen to US$2 473 per ounce on the 16^th of July 2024, setting a new record high for the bullion price. Previously, a record high was observed on 20 May 2024 when the prices shoot to US$2439 per ounce.

On a year-to-date basis, gold increased 405.63 USD/t oz. or 19.67% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity.

The recent surge was a result of a softer dollar due to political uncertainty surrounding the upcoming United States elections.

These events, have eased the dollar index performance to hit a low level not seen in about four months at 103.7, shedding 1.3% against Yen and the Pound.

However, on a broader scope, the bullion is riding on global economic fragmentation necessitated by the geopolitical tensions, started by Hamas when it attacked Israel and Russia’s imperialistic war on Ukraine.

The U.S. dollar became the official global reserve currency in 1944, delegated by 44 allied countries called the Bretton Woods Agreement.

However, the demand for Treasury securities and the deficit spending to finance the Vietnam War and the Great Society domestic programs caused the United States to flood the market with paper money. With growing concerns over stability, the countries converted dollar reserves into gold.

On the other hand, gold is a proven hedge against inflation as it  preserve the real value of assets when other prices rise. This is because, unlike traditional fiat currencies, whose value can diminish as central banks print more money, gold's worth remains resilient.

This is a golden opportunity Zimbabwe’s gold producers can leverage on. According to World Gold Council, Zimbabwe ranks 8^th in Africa in terms of gold production.

Gold is the largest foreign currency earner in the country, accounting for a third in terms of exports. In May, the mineral accounted for 42.5% of overall exports whiloe the mining industry itself accounts for over 60% in foreign currency receipts.

Largest gold producer is Kuvimba Mining House where its flagship operation is Freda Rebecca which accounts for 70% of the total gold output.  Following Kuvimba is Caledonia and then Padenga Holdings makes up the top three.

Zimbabwe produced the most gold in 2022 where it recorded 35 tonnes while output plunged to a mere 3 tons in 2008, at the height of Zimbabwe's political and hyperinflation crisis.

 In 2024, Zimbabwe is targeting 40 tones after falling to mere 30 tonnes in 2023.

Despite these higher targets, the country still lags behind its regional peers, despite its significant potential.

This is largely due to controversial polices, such as the 25% surrender portions, high electric charges amid massibve blackouts and low prices from Fidelity which promotes gold leekages.

All of the above, makes operating costs for the mines high, thus lowers gold output and capitalisation of projects at company level.

Two leading gold producers, Kuvimba and Caledonia are looking for US$150 million and US$309 million to revive Shamva and Bilboes mines.

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