After a volatile yet rewarding year for commodities, gold and platinum group metals (PGMs) have once again taken centre stage in the global market narrative — with South African mining equities leading the charge. The resource index as at 31 October 2025 is up 95% year to date, while the overall equity market (Capped SWIX) has gained 33.1%, driven largely by the strength in gold and platinum stocks as well as tech heavyweights Naspers and Prosus.
Global markets have navigated a challenging 2025. Persistent geopolitical tensions, uneven global growth, and a pivot toward monetary easing have shaped investor sentiment. While global markets have done well with the MSCI World Index gaining 19.8% in USD year-to-date, emerging markets, including South Africa, have benefited from renewed capital inflows and a softer US dollar.
Local equities have weathered weaker domestic growth and fiscal strain, finding support from global commodity tailwinds and relatively attractive valuations.
Gold’s performance has been nothing short of remarkable. Prices surged past US$4,000 per ounce, driven by a convergence of macroeconomic and geopolitical factors.
According to Laurium Capital’s analysis, three core drivers underpin this rally:
ETF investors, after a period of outflows through 2023, have returned to the market. Global gold ETF holdings began to rise again in mid-2024, with institutional investors now holding approximately 2.8% of AUM in gold.
“Despite earlier outflows, the combination of lower interest rates, central bank accumulation, and heightened geopolitical anxiety has sustained gold’s upward trajectory,” notes Laurium Capital. “On balance, we expect many of these supportive drivers to persist into 2026.”
South African gold producers have been key beneficiaries. Stock performance has been mixed, with operational challenges tempering enthusiasm, but strong prices have bolstered margins and cash flows. Companies with lower-costs and solid balance sheets are particularly well positioned for continued gains.
While gold’s story is largely macro-driven, the PGM narrative is rooted in tight physical markets and constrained supply.
PGM production remains under strain, with aging mines, limited capital investment, and muted recycling flows keeping supply growth in check. Meanwhile, demand has proven more resilient than expected.
The global transition to battery electric vehicles (BEVs) has slowed, with a stronger shift toward hybrids — vehicles that still require catalytic converters containing platinum, palladium, and rhodium.
China remains a crucial pillar of demand: platinum imports remain strong, trading volumes on the Shanghai Gold Exchange continue to grow and there are early signs of a recovery in platinum jewellery demand. Platinum and palladium lease rates have spiked which points to a tightening physical market, while investor interest in PGM metals has given rise to higher ETF holdings.
“Despite years of underperformance, PGMs are showing signs of recovery,” Laurium Capital observes. “The metal supply-demand balances point to persistent deficits over the medium term, creating a supportive backdrop for prices across platinum, palladium, and rhodium.”
For South Africa, the implications are significant. The mining sector remains a vital source of export earnings, fiscal revenue (corporate tax and royalty collections), and employment — and rising precious metals prices provide a welcome offset to structural domestic challenges.
However, infrastructure constraints and policy uncertainty continue to weigh on investor confidence. Laurium Capital notes that local equities remain undervalued relative to global peers, and that selective opportunities exist.
“South African markets have shown resilience despite a tough operating environment,” Laurium Capital concludes. “With global disinflation, lower interest rates, and supportive commodity prices, the local bourse stands to benefit from renewed investor appetite — provided reform momentum continues.”
As global markets adjust to a new phase of monetary easing and geopolitical fragmentation, gold and PGMs remain key beneficiaries of investor uncertainty and physical market tightness. For South African miners and investors alike, the coming year offers both challenges and opportunities — and Laurium Capital expects some positive spillover into the SA economy and domestically focussed shares.
Article from Daily Maverick
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