Record gold prices slash Zimbabwe’s trade deficit

Semi-manufactured gold was the leading export commodity during the first quarter, earning the country US$1.4 billion.

Business Writer

WITH gold prices hitting a new record high on Tuesday, Zimbabwe is set for a substantial boost, a continuation of a trend where gold exports have already helped narrow the country’s trade deficit.

Fuelled by speculation of impending US interest rate cuts and heightened trade policy uncertainty, gold prices soared to a new record on Tuesday as investors sought refuge in the precious metal.

Spot gold rose by 0,8 percent, setting a new record at US$3 508,54 an ounce, while December gold futures reached a peak of $3 578,20/oz. Gains were also widespread across the broader metals market.

Silver shot up to a level not seen in nearly 14 years, while platinum neared its highest mark in 11 years. Zimbabwe is a major producer of platinum.

The widespread commodity rally occurred as the United States dollar weakened to a five-week low, a reaction to the market’s belief that US interest rates will soon be lowered.

Zimbabwe’s trade deficit dropped sharply in July, shrinking by 94,5 percent to only US$8,7 million from a US$158,6 million deficit in June. The Zimbabwe National Statistics Agency (ZimStat) attributes the improvement to a strong performance in the commodities, particularly gold.

According to the Reserve Bank, Zimbabwe’s exports reached about US$877,5 million in July, representing a 21,3 percent increase over the US$723,5 million recorded in the previous month.

In July, Gold exports contributed US$310 million, representing about 35,4 percent of the total exports. In seven months to July this year, gold exports registered a strong performance, surging to US$1 385 billion in the first seven months of 2025, a significant 60,5 percent increase from the US$863,1 million earned during the same period in 2024, according to the latest official statistics.

The growth means that Zimbabwe has already generated over 91 percent of the US$1,52 billion total from gold exports for the entire previous year.

The outlook for international gold prices is bullish for the near to medium term.

Market analysts, including those from JP Morgan, are forecasting that prices could average US$3 675 per ounce by late 2025 and potentially hit the US$4 000 per ounce mark by mid-2026.

The optimistic projection is primarily fuelled by strong demand from both central banks and institutional investors. Several key macroeconomic and geopolitical factors are expected to support this upward trajectory.

Heightened geopolitical tensions worldwide are driving a flight to safety, with gold serving as a reliable haven asset.

Additionally, persistent high inflation erodes the purchasing power of traditional currencies, pushing investors toward gold as a store of value.