Bloomberg Audio Studios, podcasts, radio news.

Bloomberg Audio Studios, podcasts, radio news.

And Israeli drone strike near the Lebanon Syria border has reportedly killed a prominent Syrian businessman, the first foreign incursion military incursion into Russia since World War Two. Tamas says Israel killed its political leader Ismaeohania in an airstrike on Tehran. Gold is back in fashion. Central banks around the globe are returning to the precious metal as geopolitical tensions increase, and many African nations are looking to build up reserves too as they look for stability at a time of growing uncertainty, and the price of gold is responding.

And Israeli drone strike near the Lebanon Syria border has reportedly killed a prominent Syrian businessman, the first foreign incursion military incursion into Russia since World War Two. Tamas says Israel killed its political leader Ismaeohania in an airstrike on Tehran. Gold is back in fashion. Central banks around the globe are returning to the precious metal as geopolitical tensions increase, and many African nations are looking to build up reserves too as they look for stability at a time of growing uncertainty, and the price of gold is responding.

Gold continues in terms of price. It's March ever higher. Gold is a great safe haven.

Gold continues in terms of price. It's March ever higher. Gold is a great safe haven.

The spot price of gold touched two thousand, four hundred and eighty three dollars and seventy three cents to us pronounce.

The spot price of gold touched two thousand, four hundred and eighty three dollars and seventy three cents to us pronounce.

That's its highest price ever. We've got to going to three thousand dollars seven next twelve.

That's its highest price ever. We've got to going to three thousand dollars seven next twelve.

So what's behind the push for bullion and will this trend continue? I'm Jennifer Zabasaja and this is the Next Africa Podcast, bringing you one story each week from the continent driving the future of global growth with the context only Bloomberg can provide. Bloomberg's Ray Lovu has been following this rush for gold and he's joining us now from Zimbabwe. Thanks for joining us, Ray, how are you.

So what's behind the push for bullion and will this trend continue? I'm Jennifer Zabasaja and this is the Next Africa Podcast, bringing you one story each week from the continent driving the future of global growth with the context only Bloomberg can provide. Bloomberg's Ray Lovu has been following this rush for gold and he's joining us now from Zimbabwe. Thanks for joining us, Ray, how are you.

Thank you for having me Jen, I'm very well.

Thank you for having me Jen, I'm very well.

Events Thanks so much for being here. Listen, let's start maybe with the history if you can, if you could just take us back to really how this gold rush started.

Events Thanks so much for being here. Listen, let's start maybe with the history if you can, if you could just take us back to really how this gold rush started.

So we've seen a couple of African nations jumping on to gold basically two prop up the economies. That kicked off back in about twenty twenty two with Ghana basically swapping gold for oil to pay for oil because of an effects shortage, and then last year Madakasca as well jumping onto gold to try and prop up their.

So we've seen a couple of African nations jumping on to gold basically two prop up the economies. That kicked off back in about twenty twenty two with Ghana basically swapping gold for oil to pay for oil because of an effects shortage, and then last year Madakasca as well jumping onto gold to try and prop up their.

Reserves as well.

Reserves as well.

Madakaska is the largest vie in the producer in the world and they saw a deep in production and so naturally the shift to gold was an attempt to try and ensure that they've diversfied their portfolio, have enough supply of for x and then particularly the CAA. We've seen several other African countries as well getting into that playbook, particularly Tanzania as well, buying about six tons of gold in.

Madakaska is the largest vie in the producer in the world and they saw a deep in production and so naturally the shift to gold was an attempt to try and ensure that they've diversfied their portfolio, have enough supply of for x and then particularly the CAA. We've seen several other African countries as well getting into that playbook, particularly Tanzania as well, buying about six tons of gold in.

June, and you mentioned ray the four X reserves. Is that the main reason behind why a lot of these banks are looking to build up their gold reserves or are there other issues that they're maybe looking at and saying this is the opportune time.

June, and you mentioned ray the four X reserves. Is that the main reason behind why a lot of these banks are looking to build up their gold reserves or are there other issues that they're maybe looking at and saying this is the opportune time.

Well, that's one of the reasons, but much broader than that. One of the compelling reasons for the central banks is to diversify the app portfolio. The central bankers that we did manage to speak to South Sudan and Zimbabwe's cases in point points out that their strategy to diversify their portfolio and their holdings. But U knowally, given the global attentions that are at play at the moment, the war in Ukraine and what we're seeing in the Middle East as well, so most of these African countries are nervous at what the implications of some of these events mean for them domestically. So using gold, which historically has always been a safe haven, offers them comfort. And I would also add on and say some of these African countries actually produce gold, so they do have a channel where they have within country the ability to buy gold from atisanal miners buy it in local currency and they keep the holdings and then sell it off for effects at whatever stage they may then require to show up their reserves.

Well, that's one of the reasons, but much broader than that. One of the compelling reasons for the central banks is to diversify the app portfolio. The central bankers that we did manage to speak to South Sudan and Zimbabwe's cases in point points out that their strategy to diversify their portfolio and their holdings. But U knowally, given the global attentions that are at play at the moment, the war in Ukraine and what we're seeing in the Middle East as well, so most of these African countries are nervous at what the implications of some of these events mean for them domestically. So using gold, which historically has always been a safe haven, offers them comfort. And I would also add on and say some of these African countries actually produce gold, so they do have a channel where they have within country the ability to buy gold from atisanal miners buy it in local currency and they keep the holdings and then sell it off for effects at whatever stage they may then require to show up their reserves.

So it's really a diverse mix of reasons why we're seeing many of these countries jumping onto the cold rush, as it were.

So it's really a diverse mix of reasons why we're seeing many of these countries jumping onto the cold rush, as it were.

And especially when it comes to commodities, we are hearing more and more African nations trying to at least reap some of the benefits right that global investors are getting with commodity prices right now. Right when it comes to this gold rush, and specifically maybe we talk about Zimbabwe. Zimbabwe of course has a long history with the US dollar, and the reporting says that the attempt was maybe to try to dedollarize the economy. Right, how much is the dollar and the usd and what's happening in the US sort of playing into this gold rush.

And especially when it comes to commodities, we are hearing more and more African nations trying to at least reap some of the benefits right that global investors are getting with commodity prices right now. Right when it comes to this gold rush, and specifically maybe we talk about Zimbabwe. Zimbabwe of course has a long history with the US dollar, and the reporting says that the attempt was maybe to try to dedollarize the economy. Right, how much is the dollar and the usd and what's happening in the US sort of playing into this gold rush.

I think it's effect for different countries. In zimobwez case, Zak definitely an outlie. I think the overall strategy and focus is to deterlarize. They've not been shy about saying that openly. Whether it will succeed or not is something that we keep an eye on. But for other countries, I don't get the sense that it's necessarily slanted towards appending the dollar, because the dollar still plays a pivotal role in terms of the mix of reserves. But I think for countries like Uganda is another example which has also moved to the cold rush, buying William is purely a way to diversify given some of the domestic issues that are happening in Uganda, the LGTQ situation that took place where basically, you know, there's a new legislation that came on board and then Uganda was then cut off from funding. So they are looking at that and saying, look, they may be a possibility that we may not have finance accessible to us because of the laws that we've elected. Therefore gold could offer us some room to continue the smooth running.

I think it's effect for different countries. In zimobwez case, Zak definitely an outlie. I think the overall strategy and focus is to deterlarize. They've not been shy about saying that openly. Whether it will succeed or not is something that we keep an eye on. But for other countries, I don't get the sense that it's necessarily slanted towards appending the dollar, because the dollar still plays a pivotal role in terms of the mix of reserves. But I think for countries like Uganda is another example which has also moved to the cold rush, buying William is purely a way to diversify given some of the domestic issues that are happening in Uganda, the LGTQ situation that took place where basically, you know, there's a new legislation that came on board and then Uganda was then cut off from funding. So they are looking at that and saying, look, they may be a possibility that we may not have finance accessible to us because of the laws that we've elected. Therefore gold could offer us some room to continue the smooth running.

Of the economy.

Of the economy.

So I think for different countries there's different reasons why they are moving to go, but certainly Zimbablos case, it's clear cut it's an attempt to try and move away from the dollar.

So I think for different countries there's different reasons why they are moving to go, but certainly Zimbablos case, it's clear cut it's an attempt to try and move away from the dollar.

Is there a.

Is there a.

Risk to the strategy and this approach, And I know you're saying it's different depending on which country we're looking at, but can you make the statement that maybe having too much gold reserves could potentially be a downside for some of these central banks, or you know, is there a perfect balance that these countries really need to strike.

Risk to the strategy and this approach, And I know you're saying it's different depending on which country we're looking at, but can you make the statement that maybe having too much gold reserves could potentially be a downside for some of these central banks, or you know, is there a perfect balance that these countries really need to strike.

So the indication that we have for now, and also coming from the World Gold Council, they expect central bankers right around the world to increase their holdings for the next twelve months. So there isn't any immediate risk in terms of accumulating gold right now. The price of gold has been very high. It's record highed this year and some of the forecasts putting it at twenty seven hundred by the end of the year, and some analyst also think it could preach three thousand dollars by early next year. So I think the outlook definitely is favorable at the moment, and the countries that are on this cold rush of Polish, they feel that they're not going to lose out or they're going to have any risk whatsoever at this point because I think of indications really point to a positive focused for gold.

So the indication that we have for now, and also coming from the World Gold Council, they expect central bankers right around the world to increase their holdings for the next twelve months. So there isn't any immediate risk in terms of accumulating gold right now. The price of gold has been very high. It's record highed this year and some of the forecasts putting it at twenty seven hundred by the end of the year, and some analyst also think it could preach three thousand dollars by early next year. So I think the outlook definitely is favorable at the moment, and the countries that are on this cold rush of Polish, they feel that they're not going to lose out or they're going to have any risk whatsoever at this point because I think of indications really point to a positive focused for gold.

Stick with me, Ray when we come back, We're going to look at which other countries are building up their reserves and how long this trend might actually continue.

Stick with me, Ray when we come back, We're going to look at which other countries are building up their reserves and how long this trend might actually continue.

We'll be right back and welcome back.

We'll be right back and welcome back.

Ray in Lovu is still with us and we are talking all things gold and gold reserves. Ray, we talked about a few of the countries there that are building up their gold reserves. Are we seeing more and more countries really joining this trend? Are they seeing countries like Uganda and zim benefiting off of it and coming out and making their own statements about how they want to maybe get into this as well.

Ray in Lovu is still with us and we are talking all things gold and gold reserves. Ray, we talked about a few of the countries there that are building up their gold reserves. Are we seeing more and more countries really joining this trend? Are they seeing countries like Uganda and zim benefiting off of it and coming out and making their own statements about how they want to maybe get into this as well.

Yeah, I think the countries themselves are certainly bullish about getting into gold and their main driver right across the central theme is basically diversifying their portfolios. And some of these countries, Uganda and Zimba, particularly in Zimbabwe, they do have the gold in country, they produce gold, they have gold mines, so for them it's almost like a no brainer in a sense to say, look, we have the commodity, why not build reserves using the commodity which is available in country. Ycana is not a major goal producer, but they do have several minds as well. We do expect and see other countries jumping on board. South Sudan, like I mentioned earlier, the governor they did say he's looking at what's happening at the moment and will be bringing legislation to Parliament and to try and see if that could be something that could be approved in Nigeria as well. Recently or so, lawmakers they ask the Central Bank to begin to look at using gold to show up the economy. So there's definitely I think some trend or some team that's playing out along across the continent in different measures. But I think the entire sort of like framework is about divers fine and supporting the different economies ultimately.

Yeah, I think the countries themselves are certainly bullish about getting into gold and their main driver right across the central theme is basically diversifying their portfolios. And some of these countries, Uganda and Zimba, particularly in Zimbabwe, they do have the gold in country, they produce gold, they have gold mines, so for them it's almost like a no brainer in a sense to say, look, we have the commodity, why not build reserves using the commodity which is available in country. Ycana is not a major goal producer, but they do have several minds as well. We do expect and see other countries jumping on board. South Sudan, like I mentioned earlier, the governor they did say he's looking at what's happening at the moment and will be bringing legislation to Parliament and to try and see if that could be something that could be approved in Nigeria as well. Recently or so, lawmakers they ask the Central Bank to begin to look at using gold to show up the economy. So there's definitely I think some trend or some team that's playing out along across the continent in different measures. But I think the entire sort of like framework is about divers fine and supporting the different economies ultimately.

And Ray, you have a story out now about how Zimbabwe's gold back currency is actually being used potentially that is coming from the central Bank governor telling that two reporters. Is this a success story already? Is it too early to know whether or not this will be a success for a place like Zimbabwe.

And Ray, you have a story out now about how Zimbabwe's gold back currency is actually being used potentially that is coming from the central Bank governor telling that two reporters. Is this a success story already? Is it too early to know whether or not this will be a success for a place like Zimbabwe.

Yeah, so definitely.

Yeah, so definitely.

We had a chance to interview the Central Bank Governor, John Mischavan, and he's Polish in terms of what the go back currency, the zeke is the short for Zimbabee gold is down to the economy. Inflation has been tamed, exchange rate volatility has ended. So from that standpoint, in terms of the immediate visible turnaround of the economy who is very polish about it, and what he's seeking to do now is to increase the gold reserves. When the Zeke was launched in early April, it was backed by two point five tons of gold and about hundred million dollars in foreign currency. So the Governor when we spoke to him, his targeting to have over three tons by the end of the year in terms of the gold.

We had a chance to interview the Central Bank Governor, John Mischavan, and he's Polish in terms of what the go back currency, the zeke is the short for Zimbabee gold is down to the economy. Inflation has been tamed, exchange rate volatility has ended. So from that standpoint, in terms of the immediate visible turnaround of the economy who is very polish about it, and what he's seeking to do now is to increase the gold reserves. When the Zeke was launched in early April, it was backed by two point five tons of gold and about hundred million dollars in foreign currency. So the Governor when we spoke to him, his targeting to have over three tons by the end of the year in terms of the gold.

Holdings of physical gold holdings.

Holdings of physical gold holdings.

So ready, that signals that this is the path that Zimbabwe is committed to and they're seeking to continue on it.

So ready, that signals that this is the path that Zimbabwe is committed to and they're seeking to continue on it.

And I wondered are people actually using the zig Is it now being used more than the dollar was?

And I wondered are people actually using the zig Is it now being used more than the dollar was?

So the years dollar is still the dominant currency of transaction in the economy. It's as of the related statistics that we have, it's holding about seventy percent of all transactions are donion dollars and about thirty percent in the zeke.

So the years dollar is still the dominant currency of transaction in the economy. It's as of the related statistics that we have, it's holding about seventy percent of all transactions are donion dollars and about thirty percent in the zeke.

So initially when the Zeke was.

So initially when the Zeke was.

Launched and took over from the defunct Zimbabwe Dollar, it accounted for about fifteen percent. So it's doubled in just over three months in terms of its usage and the government is also created The Minister Nance Minister last week announced his budget, where is basically ordered government departments to accept payments in local currency in the z and not in US dollars. So they're creating these pockets of demand to have that demand or to create demand for the currency. But in terms of the numbers, there's certainly a lot of usage now on paper, but day to day, I think the preference for ordinary people is to transact in US dollars. That's what people left access to easily. ZG banknotes not so much. I've when you come across one ten ZG note, which is about seven US cents since the time the currency was launched.

Launched and took over from the defunct Zimbabwe Dollar, it accounted for about fifteen percent. So it's doubled in just over three months in terms of its usage and the government is also created The Minister Nance Minister last week announced his budget, where is basically ordered government departments to accept payments in local currency in the z and not in US dollars. So they're creating these pockets of demand to have that demand or to create demand for the currency. But in terms of the numbers, there's certainly a lot of usage now on paper, but day to day, I think the preference for ordinary people is to transact in US dollars. That's what people left access to easily. ZG banknotes not so much. I've when you come across one ten ZG note, which is about seven US cents since the time the currency was launched.

Wow, just one in a few months, let's just And then on on gold, you were mentioning the price of gold. You were just taking a look at it. It's constantly changing. You said, it's pretty pretty bullish forward outlook for gold. Is there anything maybe that could get in the way of that. Not.

Wow, just one in a few months, let's just And then on on gold, you were mentioning the price of gold. You were just taking a look at it. It's constantly changing. You said, it's pretty pretty bullish forward outlook for gold. Is there anything maybe that could get in the way of that. Not.

At the moment.

At the moment.

The outlook from the world called console really is gold is going to continue on its path. Obviously, there's a lot of attention on the your political tensions in the Middle East and the US election coming up in November, and also the FAID, what's going to cut rates so I think at the moment, really the bet is still on gold. I can't immediately see a shift from.

The outlook from the world called console really is gold is going to continue on its path. Obviously, there's a lot of attention on the your political tensions in the Middle East and the US election coming up in November, and also the FAID, what's going to cut rates so I think at the moment, really the bet is still on gold. I can't immediately see a shift from.

That, absolutely, and it's interesting too to look at how the other commodities play out as well. There's a note from a Bank of America about silver in particular and how that compares to gold. It's all be interesting to watch those metals. Thanks so much. Ray, really appreciate your reporting and for joining us on the podcast this week.

That, absolutely, and it's interesting too to look at how the other commodities play out as well. There's a note from a Bank of America about silver in particular and how that compares to gold. It's all be interesting to watch those metals. Thanks so much. Ray, really appreciate your reporting and for joining us on the podcast this week.

Thank you, Jen.

Thank you, Jen.

You can read more from Ray and the team on Bloomberg right now. We will put a link in the show notes. So clearly this is African nations responding to the uncertainty in the world right now and what that might pretend for their own economies. But it might be too early to conclude that this goldrush is actually a silver bullet for countries struggling with currency volatility and their own financing setbacks. This program was produced by Adrian Bradley. Don't forget to follow and review this show wherever you usually get your podcast. I'm Jennifer's Apisaja. Thanks so much for listening.

You can read more from Ray and the team on Bloomberg right now. We will put a link in the show notes. So clearly this is African nations responding to the uncertainty in the world right now and what that might pretend for their own economies. But it might be too early to conclude that this goldrush is actually a silver bullet for countries struggling with currency volatility and their own financing setbacks. This program was produced by Adrian Bradley. Don't forget to follow and review this show wherever you usually get your podcast. I'm Jennifer's Apisaja. Thanks so much for listening.