Gold prices dip as investors brace for rate hikes Gold prices slipped yesterday as investors braced for aggressive rate hikes by major central banks this week, especially from the US Federal Reserve, to tame high inflation. Spot gold was down 0.3 percent at US$ 1 669.69 per ounce, as of 0310 GMT.US gold futures fell 0.2 percent at US$1 679.70. Gold is known as a safe investment amid inflation woes, but high interest rates increase the opportunity cost of holding non – yielding bullion. “A hawkish hike would be another nail in the gold coffin, and will likely send prices down to the US$1 600 – US$1 650 range” The US Fed’s Federal Open Market Committee is expected to begin its two – day meeting on interest rates on September 20 and announce its decision the following day. Markets are fully pricing in a 75 – basis – point rate hike by the US central bank.
Zim recovery hinges on viable policies: IMF The International Monetary Fund (IMF) says Zimbabwe’s outlook will be determined by its readiness to implement growth focused policies, along with government’s ability to respond to external shocks. In a statement released following a staff visit to Harare, the fund reiterated several warnings, adding that uncertainty remained high in Zimbabwe, with recent rate hikes threatening recovery. Rate hikes have been compounded by rocketing inflation, exchange rate fragilities and a frustrating forex crisis. “Uncertainty remains high”, the fund said. However, the outlook will depend on the evolution of external shocks, the policy stance and implementation of inclusive growth – friendly policies.” The IMF said real gross domestic product (GDP) growth was expected to be at 3,5% in 2022, reflecting a slowdown in agricultural and energy outputs. This growth will be lower than the 4,6% projected by government at the end of July. Government slashed the growth to 4,6% after previously projecting 5,5% citing the poor agricultural season and external shocks. The IMF said Zimbabwe’s economy had shown resilience in the face of significant shocks.
Following a terrible rout this month, the local bourse made significant gains
The stock market seems to have reached an inflection point In response to the announcement that the government had paid contractors almost ZWL$170 billion, the ASI, which had suffered months of consecutive losses, increased by 3% to complete the session at 10,143.43, while the Top 10 index increased by 5.36% to close the session at 5,615.34. 827 thousand shares were traded for $134,49 million, with Innscor serving as the aggregate's anchor for both volume and value. Axia, the top stock on the move board, increased by 14.87% after 75 thousand shares were traded, ultimately settling at $28.65. Significant adjustments were made to Ecocash Holdings as well, which firmed 14.49% to close at $30.00.
GB Holdings and Turnall, two companies trading at the circuit breaker's lower limit, were the worst losers, losing 15% each to end the day at $1.7 and $3.32, respectively. RioZim, finished the day down 14.74% at $81.00.
The MCMS and OMTT led the movers on the ETF board, rising 7.38 percent and 13.6 percent, respectively, while the DMCS and the MIZ declined, suffering losses of 0.44% and 0.85%, respectively.
On the VFEX, The All Share Index closed the day flat.