Much sooner rather than later, local gold producers could find themselves subject to a 10% royalty to the Government of Zimbabwe, as global banks project gold prices to surpass US$4,800 an ounce this year, Mining Zimbabwe can report.
By Ryan Chigoche
In his 2025 National Budget presented last month, Finance Minister Mthuli Ncube proposed doubling the gold royalty rate to 10% for bullion sold above US$2,501 an ounce, a move that immediately raised concern among producers.
However, during a late-night budget debate in Parliament, Ncube softened the proposal, telling lawmakers that the higher royalty would only apply if gold prices exceeded US$5,000 an ounce.
The clarification offered temporary relief to large-scale producers, who had warned that a lower threshold could undermine viability.
Despite the adjustment, market analysts believe Zimbabwean gold producers may still be exposed to the higher royalty sooner rather than later, as major banks remain firmly bullish on the metal’s price trajectory.
Morgan Stanley said in a note released on Monday that gold prices could reach fresh record highs this year, potentially climbing to US$4,800 an ounce by the fourth quarter.
The bank cited falling interest rates, the possibility of a leadership change at the US Federal Reserve, and sustained buying by central banks and investment funds as key drivers.
Those same factors propelled gold to multiple record levels in 2025, with the metal last peaking at US$4,549.71 an ounce on Boxing Day.
Over the calendar year, gold was among the best-performing commodities, posting gains of nearly 65%.
Analysts expect the momentum to extend into this year, supported by ongoing geopolitical risks that continue to strengthen gold’s appeal as a safe-haven asset.
Morgan Stanley pointed to recent developments in Venezuela as one potential catalyst for further buying.
After delivering its strongest annual performance since 1979, gold is attracting increasingly bullish calls from major financial institutions.
Bank of America echoed the positive outlook on Monday, with analysts led by head of metals research Michael Widmer projecting gold to average US$4,538 an ounce in 2026, while remaining a key portfolio hedge.
Once the higher royalty is triggered, its material impact on producers remains uncertain.
Government officials argue that Zimbabwe must also benefit from the price boom unfolding in global gold markets, even as miners caution that higher fiscal burdens could affect production and investment decisions.
