• Record Gold Output in Zimbabwe: Zimbabwe achieved its highest gold output in the first two months of 2025, reaching a total of...
• Geopolitical Factors Drive Prices: Surging gold prices, influenced by geopolitical tensions and economic uncertainty, have incentivized miners to increase production
• Structural Challenges Persist: Zimbabwe's artisanal mining sector faces significant operational fragility due to weather impacts and regulatory constraints

First 2 months gold output since 2018 in tonnes

Source: Fidelity Printers and Refiners, Equity Axis Research

Harare- Zimbabwe has recorded its highest gold output in two months, marking a new record high as the country progresses toward its year-end production target. After achieving a record 36.48 tonnes in 2024, Zimbabwe has set an ambitious goal of 40 tonnes for 2025, with 34.3 tonnes remaining to be produced over the next 10 months.

The country’s gold production typically peaks between March and October, prior to the rainy season, which disrupts operations particularly for small-scale miners reliant on manual extraction methods. Output historically declines from November through March, though signs of recovery often emerge by late March.

This recent surge in production was driven by record-breaking gold prices in January and February 2025, fueled by geopolitical tensions in the Middle East and Eastern Europe, as well as economic uncertainty linked to U.S. tariff policies. These dynamics elevated gold’s appeal as a safe-haven asset, incentivizing miners to ramp up output despite seasonal challenges

Gold price and performance in key currencies

Source: World Gold Council, Equity Axis Research

Gold hit new highs during the month, supported by a weaker US dollar, extending its y-t-d gains to 9%. Gold continued its uptrend in February, hitting multiple new highs before pulling back to end the month at US$2,835/oz  up 0.8% m/m. This performance was echoed across major currencies, all of which also registered new record highs. General interest in gold was bolstered by continued flows of gold into COMEX inventories, driven by continued tariff uncertainty.

The Gold Return Attribution Model (GRAM) reflects a confluence of macro-financial drivers underpinning gold's recent performance, with US dollar depreciation emerging as a critical factor alongside elevated geopolitical risk premiums and a moderation in real interest rates. January’s price momentum, while creating a modest technical overhang, was countervailed by robust flight-to-quality inflows, evidenced by a US$9.4bn (100t) net inflow into global gold ETFs the largest since March 2022. This bifurcation reflects strategic reallocations by institutional investors, particularly in US and Asian markets, hedging against monetary policy uncertainty and escalating geopolitical fissures.

In Zimbabwe, however, gold sector dynamics diverged sharply from global tailwinds. Despite a supportive gold price environment hovering near US$2,000/oz, February 2024 deliveries contracted 17.7% MoM to 2.56 tonnes, the lowest since June 2023.

The downturn was structurally concentrated in the artisanal segment, where output collapsed 27.6% MoM to 1,640 kg.

This reflects acute operational fragility: small-scale miners, reliant on rudimentary extraction methods, were incapacitated by torrential rainfall that inundated open-pit operations.

Unlike industrialised producers, artisanal actors lack capital-intensive dewatering systems or weather-resilient technologies, exposing systemic vulnerabilities in Zimbabwe’s informal mining infrastructure.

Gold production in tonnes

Source: Fidelity Printers, Equity Axis Research

Large-scale producers eked out a 6.9% MoM production gain to 928 kg, though this failed to offset sector-wide declines. RioZim, a pivotal player, remained hamstrung by legacy operational inefficiencies and transactional uncertainty linked to its protracted divestiture process. Persistent electricity rationing and tariff escalations further eroded productivity, with grid instability imposing recurring downtime on processing facilities.

While firmer gold prices may incentivise marginal output, structural constraints notably the hike in export surrender requirements to 30% introduce fiscal drag. Miners face FX liquidity constraints, as surrender obligations compel conversion of proceeds into overvalued Zimbabwe Gold (ZiG), eroding profitability and impairing capacity to service foreign-denominated debt or import critical machinery. This regulatory friction could suppress 2025 output efficacy.

Consequently, production forecasts for 2025 face material downward revisions, with high-cost artisanal output particularly susceptible to macroeconomic distortions.

While seasonal rainfall abatement may support a near-term recovery, systemic inefficiencies suggest Zimbabwe’s gold sector will underperform its theoretical capacity, with output gaps persisting even amid elevated global prices. 

Globally, gold’s investment thesis is being recalibrated against shifting macroeconomic expectations. Market participants are pricing in a dovish pivot by the Federal Reserve, with two full rate cuts anticipated by year-end despite persistent inflationary pressures.

Concurrently, fading optimism around the “Trump trade” characterised by USD strength and equity market rallies has given way to concerns over protectionist tariffs and geopolitical realignments, which could widen fiscal deficits and pressure sovereign credit ratings. These dynamics, coupled with rising defense expenditures across major economies, are amplifying gold’s dual role as a monetary stabilizer and geopolitical risk mitigator. 

In synthesis, gold’s performance reflects bifurcated fundamentals: robust institutional demand and macro-financial tailwinds contrast with localised supply-chain fragility, as exemplified by Zimbabwe’s weather and policy-driven constraints.

While price discovery remains anchored to central bank liquidity trajectories and risk sentiment, structural deficits in artisanal production hubs reflects the metal’s tightening physical supply-demand balance, reinforcing its strategic allocation in portfolios anticipating prolonged macro uncertainty.

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