Zimbabwean producers ramp up investments as gold’s bull run fuels renewed optimism and record inflows
Gold’s relentless rally is reshaping investor sentiment worldwide, with HSBC now forecasting prices could climb to US$5,000 per ounce by 2026 — a projection already reverberating through global and local mining sectors, where renewed confidence is driving investment and expansion.
By Ryan Chigoche
The British banking giant’s latest outlook, released Friday, predicts the “bull wave” will extend into next year, supported by geopolitical tension, robust central bank buying, and rising financial instability. HSBC lifted its 2025 average gold price forecast to US$3,455 and 2026 to US$4,600, citing economic policy uncertainty and escalating public debt as major factors sustaining demand.
“Unlike previous rallies, many of these new buyers are likely to stay in the gold space — not purely for profits but for diversification and safe-haven value,” the bank noted.
Global Bull Wave Lifts Sentiment
Spot gold traded around US$4,365 an ounce on October 17, close to a record US$4,379.93, marking its strongest weekly performance since 2008. Prices have gained nearly 60 percent since January, fuelled by expectations of U.S. interest rate cuts, surging exchange-traded fund inflows, and renewed safe-haven demand amid trade tensions and political uncertainty.
Analysts at Bank of America and Société Générale share HSBC’s bullish tone, expecting gold to reach new highs in early 2026 before stabilising later in the year. The rally has encouraged investors to view gold not just as a crisis hedge but as a strategic, long-term asset — a sentiment reflected in mining equities and exploration budgets.
The Spillover of the Gold Bull Wave to Zimbabwe
For Zimbabwe, where gold accounts for more than half of export earnings, the surge has been a timely economic lifeline. Gold exports doubled in the first half of 2025 to US$1.84 billion, with deliveries to the Fidelity Gold Refinery reaching 33 tonnes toward a 40-tonne national target.
Artisanal and small-scale miners (ASMs) contributed 24.5 tonnes in the first nine months — a 68 percent increase from 2024 — as high prices drew thousands of new participants. Large-scale producers, though constrained by power shortages and machinery breakdowns, are also capitalising on the favourable price environment to justify new investments and modernisation.
The bullish trend has spilled into Zimbabwe’s capital markets. The Victoria Falls Stock Exchange (VFEX), the country’s U.S. dollar-based bourse, recently surpassed US$2 billion in market capitalisation for the first time, with third-quarter turnover doubling to US$17 million.
Mining counters such as Caledonia Mining, Padenga Holdings, and Kuvimba Mining House have led the rally, mirroring global investor sentiment and reflecting growing belief in Zimbabwe’s mineral potential. The strong performance underscores how global market momentum is boosting confidence in local mining equities.
Rising Capital Commitments
Spurred by robust prices, Zimbabwean mining firms are expanding aggressively. Kuvimba Mining House plans to invest US$38 million to boost production at Freda Rebecca and has earmarked nearly US$1 billion for wider projects.
Caledonia Mining is spending US$41.8 million to extend Blanket Mine’s life to 2034, while Padenga’s Dallaglio subsidiary is investing US$30 million to develop underground operations and achieve energy self-sufficiency by 2026.
These investments point to growing optimism that high gold prices will hold over the medium term, allowing producers to strengthen output and profitability despite operational headwinds.
RBZ Strengthens Gold-Backed ZiG
The Reserve Bank of Zimbabwe (RBZ) has also taken advantage of the boom, accumulating gold and forex reserves now estimated at US$900 million to back the Zimbabwe Gold (ZiG) currency. The stronger reserve position has supported the ZiG’s stability and narrowed forex shortages, showing how global bullion gains can translate into domestic monetary resilience.
While comparisons to the 1970s and post-2008 rallies are common, analysts say today’s market dynamics are different. This cycle is being driven less by inflation fears and more by structural distrust in fiat currencies, alongside record central bank purchases exceeding 1,000 tonnes annually since 2022.
HSBC’s bullish view aligns with projections from J.P. Morgan, which expects gold to average US$3,675 in Q4 2025 and reach US$4,000 by mid-2026, and Bank of America, which sees potential spikes to US$5,000.
Though volatility could re-emerge if geopolitical tensions ease, consensus across the investment community suggests the bull market still has room to run.
For Zimbabwe, the implications are profound. Record exports, surging ASM participation, and expanding corporate investment all reflect a sector regaining its footing. Gold’s rally has not only improved cash flows — it has restored confidence, unlocking new capital and strategic ambition across the mining landscape.
If current trends persist, this renewed confidence could signal the beginning of a new investment cycle, positioning gold once again as the cornerstone of Zimbabwe’s economic stability.
