JOHANNESBURG (Reuters) -South Africa’s commodity-backed rand weakened in early trade on Tuesday, tracking a decline in gold prices, which slipped below the $4,000-per-ounce threshold.
At 0743 GMT, the rand traded at 17.4250 against the dollar, down roughly 0.7% on Monday’s close.
Spot gold was down 0.8% at $3,970.39 per ounce as of 0625 GMT as a resilient dollar and easing U.S.-China trade tensions softened demand for safe haven assets.
As a major producer of precious metals, South Africa typically benefits from stronger gold prices.
With a light domestic data calendar on Tuesday, traders are turning their attention to Wednesday’s S&P business activity survey and October’s foreign reserves data for further insight into the health of Africa’s most industrialized economy.
“The ZAR is on the defensive this morning, and the week’s most important data is now behind us. With that handled, focus will now turn to the performance of US equity markets and the risk appetite that they reflect,” ETM Analytics said in a research note.
On the Johannesburg Stock Exchange, the Top-40 index was down 1% in early trade, hurt mainly by mining stocks.
South Africa’s benchmark 2035 government bond also weakened, as the yield rose 1 basis point to 8.855%.
(Reporting by Sfundo Parakozov; Editing by Andrew Heavens)
