Gold Hits an All-Time Low While 1500 new Zim Gold Coins Sell Like Hotcakes.
While the gold price has hit an all-time low with speculations from last week with the Fed’s speech on Friday, August 26, Zimbabwe sold 1500 new gold coins the previous week. The central bank is planning to manufacture more up to 2000 to hit the market this week.
The Mosi Oa Tunya coins came into escalation last week to help bolster the Zimdollar that keeps plummeting to curb inflation. Now, the gold coins are offered at a discounted price in the local currency while at a higher price for foreign investors’ currencies.
About 85% of the gold coins were bought in the Zim local currency and 15% in foreign currency. According to data from the Zim central bank, the gold coins have a value of 22 karats and were trading at $1,841 dollars and ZWL863 101 per unit last Monday.
Since then, the Zim dollar has made some gains following the introduction of the Mosi Oa Tanya gold coins. However, the street rate for the local unit soared to as much as ZWL850 dollars. This happened even before the introduction of the gold coins.
The street rate narrowed down to about $750 ZWL dollars late Monday afternoon. However, according to a finance manager with one of the local banks. They are still analyzing the sustainability of the demand and whether more purchases will be made for long-term holding. The reason is that the market wants to see where it will go.
As with most other gold bullion, the 22 karat coins price is based on the dollar gold price, currently selling at around 1,820 at the launch for 1oz of gold. The governor of the Zimbabwean central bank, John Mangudya, advised that the coins will offer the citizens another alternative to help stabilize financial products’ store value. The central bank’s policy rate remains at 200%, even with the inflation soaring to 238% during July.
Yet, the Monetary Policy Committee also noted that the annual inflation rate will keep increasing into September 2022, resulting from the 2021 lower base effect. Thus, keeping this in mind and looking at Zim’s inflation rate compared to the rest of the world.
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