Zimbabwe’s gold sector is set to remain supported by historically high bullion prices despite mounting pressure from elevated interest rates, with the World Gold Council (WGC) saying resilient central bank buying, strong Asian demand, and renewed inflation risks continue to underpin the precious metal’s longer-term outlook, Mining Zimbabwe can report.
By Ryan Chigoche
The assessment comes as Zimbabwe steps up efforts to increase gold production and export earnings, positioning the country’s top foreign currency earner to benefit if bullion prices remain near record highs, even as global markets navigate an uncertain monetary policy environment.
Gold ended July largely unchanged at US$4,027 per ounce after repeatedly testing the US$4,000 level during the month. According to the WGC, positive price momentum and renewed inflows into gold-backed exchange-traded funds (ETFs) offset pressure from rising bond yields, while a weaker US dollar also provided support.
The Council said European investors led ETF inflows in July, marking a notable shift as investors increased allocations to gold despite real bond yields reaching multi-year highs.
More significantly, the WGC warned that the risk of a second wave of inflation is rising, although it does not expect a repeat of the prolonged inflation spiral experienced during the 1970s.
Instead of oil shocks, today’s inflation risks are increasingly tied to geopolitical fragmentation, strategic stockpiling of critical minerals and metals, and rising government and corporate spending on artificial intelligence and industrial policy.
“Inflation could reignite if another shock arrives before inflation expectations have fully normalised,” the Council said in its latest Gold Market Commentary.
For Zimbabwe, the outlook could provide a favourable backdrop for producers at a time when the Government is seeking to expand gold output, formalise artisanal mining, and strengthen mineral export earnings.
Sustained bullion prices above US$4,000 an ounce improve operating margins for producers, increase the economic viability of lower-grade deposits, and can encourage further investment in mine expansion and exploration.
The WGC cautioned, however, that higher inflation alone is unlikely to trigger another sharp rally in gold.
Instead, bullion’s performance will depend on how inflation influences real interest rates, the US dollar, and global economic growth. Gold tends to perform more strongly when inflation is accompanied by falling real yields, a weaker dollar, or rising recession risks.
The Council also argued that today’s global gold market is being driven by a broader set of forces than in previous decades.
While US monetary policy remains influential, central bank purchases and physical demand from Asian consumers have emerged as increasingly important pillars of the market, helping gold maintain elevated prices despite historically restrictive real interest rates since 2023.
That shift is particularly relevant for Zimbabwe, whose gold industry has become increasingly important to national export earnings and foreign currency generation. A prolonged period of elevated prices would support mining revenues while strengthening government royalty collections and export receipts.
The WGC expects inflation risks to remain elevated but believes any future gains in gold are more likely to be driven by slowing economic growth, lower long-term bond yields, and continued official-sector buying than by inflation alone.
“Together with continued central bank buying and Asian consumer demand, that should prove supportive for gold, albeit without necessarily repeating the outsized gains of 2025,” the Council said.
