It finally happened on Christmas Eve. That day, the global price of gold broke through the US$4 500 mark. By early January it was touching US$4 700 and then days later it went past the ‘magical’ US$5 000 point predicted by many pundits in mid-2025.

Last year, gold – the world’s oldest precious metal – staged one of the most dramatic rallies in its modern history. Prices kept rocketing into record territory, breaking through psychological barriers that once seemed distant. While a convergence of global economic stressors ignited the surge, African producers – from Ghana’s artisanal miners to South Africa’s legacy houses – now find themselves at the crossroads of risk and opportunity.

Several key factors powered this extraordinary rally. Firstly, massive central bank buying – nations around the world, led by China and other emerging market economies, significantly expanded their gold holdings as part of strategic reserve diversification. Long-term holding behaviour by central banks effectively removed substantial quantities of bullion from liquid trading stock, tightening supply.

Gold has always, of course, been regarded as a ‘safe-haven’ by investors and therefore demand has increased owing to persistent geopolitical tensions, heightened market volatility and renewed concerns about inflation and currency risk. This has pushed investors into gold’s perceived safety net. With other asset classes under pressure, gold has stood out as a ‘store of value’. A softer US dollar and expectations of lower real interest rates has also amplified the attractiveness of gold as a hedge, strengthening demand in both institutional and retail markets.

‘In commodities, the usual maxim that “high prices cure high prices” does not apply to gold,’ Goldman Sachs analysts Daan Struyven and Lina Thomas write in a mid-January 2026 note to investors. Goldman has now said it forecasts the gold price to increase by another 10% from previous predictions. ‘The rally has accelerated since 2025 because central banks started competing for limited bullion with private sector investors,’ they write, according to a Business Insider report.

Goldman now expects gold prices to reach US$5 400 an ounce by the end of 2026, up from US$4 900 per ounce in their previous forecast.

Gold’s progress has been one for the history books: it has not only hit record nominal prices but has sustained them, creating compelling economics for miners globally – and especially for African producers whose cost structures were suddenly dwarfed by the soaring bullion prices.

Africa has long been central to the global gold story. The continent accounts for a significant portion of global gold output, with powerhouse producers such as Ghana, South Africa, Mali, Zimbabwe and Uganda all contributing to the market’s depth. In 2025, record prices translated into tangible economic gains.

Perhaps the most dramatic headline came from Uganda, where gold exports surged nearly 76% in 2025, reaching US$5.8 billion – overtaking coffee as the country’s top export.

Uganda’s bullion shipment in 2025 rose US$2.5 billion from US$3.3 billion in 2024, according to Adam Mugume, the Bank of Uganda’s executive director for research and economic analysis.

‘The attractive gold prices have incentivised new entrants into the business, generating a significant volume of exports,’ he told Reuters.

This explosion in export value illustrates how a favourable price environment can transform a country’s trade balance and macroeconomic profile almost overnight – particularly when markets are well-positioned to capitalise on demand.

Elsewhere, production data showed broad gains as countries sought to capitalise on higher prices. A snapshot of diverse locations saw Ghana, Africa’s largest gold producer, registering a significant boost in gold deliveries, with artisanal and small-scale mining (ASM) generating billions in export revenue. Zimbabwe’s output climbed sharply, reflecting both expanded industrial mining and increased ASM participation.

These trends demonstrate a key truth: when prices rise, even smaller and informal mining sectors respond swiftly, often outpacing official production increases.

For South Africa, the narrative is complex. Once the undisputed powerhouse of global gold production – producing more than 1 000 tons annually in the early 1970s – the country’s gold industry had been in long-term structural decline for decades. By the early 2020s, annual output had fallen to about 100 tons.

Yet 2025 offered a hint of revival. As gold prices climbed, South African gold equities outperformed broader markets. Local mining stocks rallied sharply, buoying indices and drawing renewed investor attention to an industry long overshadowed by platinum group metals, coal and the newer green, or critical, minerals boom.

Analysts highlighted that South African gold stocks, often perceived as undervalued, were delivering some of their best returns in decades, attracting capital from both domestic and foreign investors.

‘The safe-haven status of gold has led to its rally on concerns over the impact of tariffs on US growth and more recently the US [government] shutdown, along with heightened geopolitical tensions,’ Annabel Bishop, chief economist at Investec, told Reuters.

In short, higher bullion prices breathed new life into South Africa’s gold producers. Companies with large deep-level operations benefited from increased revenue and healthier margins, enabling them to accelerate production where costs were covered by strong prices, invest in sustaining capital and upgrades rather than belt-tightening and return cash to shareholders through dividends and buybacks as profitability strengthened.

One local producer, Pan African Resources, reported a 44.5% increase in revenues and a nearly 80% jump in profits for the year ended June 2025, according to a report in IOL.

‘In the year ended June 2025, Pan African boosted gold production, with revenues climbing to US$540 million. Profits for the year consequently soared to a record US$140.6 million, while headline earnings per share strengthened 41.9% to 5.89 US cents,’ according to IOL.

Now the company is moving ahead with capital projects in South Africa as well as expanding its footprint in Australia.

This is expected to further drive growth in earnings, production and dividends, said Pan African Resources CEO Cobus Loots.

‘In this gold price environment, and with the cash we are generating, it makes sense to spend some of the capital now,’ Loots told IOL.

These results exemplify how a booming gold price can underpin not just balance sheets but strategic decision-making too, encouraging companies to think beyond survival mode.

Rising prices have also made feasible projects that would otherwise have struggled under weaker economic conditions. South Africa saw the start of Qala Shallows, the first new underground gold mine in the country in 15 years, which began delivering ore in late 2025. West Wits, the owner of the mine, is planning to build a 30 000 ton ore stockpile by the end of the first quarter of 2026 to establish a consistent supply to Sibanye-Stillwater’s Ezulwini processing plant, which has entered into a toll treatment agreement with West Wits, according to a Mining Weekly report. Production is expected to slowly increase to about 70 000 ounces per year of gold over 12 years.

‘Supported by a strong funding position and robust infrastructure, we are firmly on track to establish a long-life gold operation within the renowned Witwatersrand basin,’ West Wits CEO Rudi Deysel told the website.

This resurgence of capital investment – even if modest compared to Africa’s larger producers – marks a symbolic turning point for the country’s gold sector.

However, South Africa’s miners still grapple with longstanding structural constraints that could dampen the full benefits of sustained high prices.

South African gold mining remains one of the most physically demanding and expensive operations globally, with deep-level mining driving high energy, labour and safety costs. Chronic infrastructure issues – especially unreliable electricity supply and logistical bottlenecks – continue to elevate operating risk, underlining why the country’s production trajectory has lagged behind other African peers despite favourable prices.

Regional policy actions also influence investment dynamics. For example, Ghana’s planned increase in royalty rates and removal of long-term stability agreements aim to capture greater national value from high gold prices, a shift that has nuanced implications for investors and producers alike.

The gold market’s momentum does show signs of endurance. Analysts project further potential gains in 2026, with stronger safe-haven demand and supportive macro conditions likely to keep prices elevated.

If prices continue upward, African producers stand to capture even greater export revenue, enhancing foreign exchange stability and public finances. South African gold companies could see margin expansion, allowing more investment in modernisation and diversification, and emerging mining hubs may draw fresh capital, potentially inspiring new discoveries and expansions, according to analysts.

However, the upside is contingent on several factors – including geopolitical volatility, currency movements, global interest rate policies and the structural reforms that African mining jurisdictions adopt.

The 2025 gold price surge was more than a short-lived rally: it was a catalyst for reimagining what African gold mining could achieve. From Uganda’s export boom and Ghana’s ASM windfall to South Africa’s renewed stock market relevance for mining companies as well as corporate profitability, the continent is capturing value that has long been dormant.

Yet the journey ahead will test resilience and strategy. Structural reforms, infrastructure investment and regulatory clarity are critical if African gold mining, particularly South Africa’s industry, is to leverage elevated prices into sustainable long-term growth.

Images: Gallo Images, iStock