South African Rand Gains for First Day in Six as Gold Rebounds

By Nasreen Seria

Aug. 11 (Bloomberg) -- South Africa's rand advanced against the dollar, snapping a five-day decline, as the prices of gold and platinum, the country's biggest exports, gained.

The currency of Africa's largest economy rallied after posting its biggest decline in more than two years last week. Gold rose for the first time in three days, climbing from a 14- week low last week as the euro slumped against the dollar, eroding the appeal of the precious metal as an alternative investment.

``We've seen a pull-back in commodity prices today'' which is helping the rand, said Ion de Vleeschauwer, chief trader in Johannesburg at Bidvest Bank Ltd., which runs the country's biggest chain of moneychangers. A stronger dollar last week ``put pressure on commodity prices and that put pressure on commodity currencies.''

Against the dollar, the rand gained as much as 1 percent to 7.6642 and was at 7.6718 by 10:14 a.m. in Johannesburg, from 7.7375 on Aug. 8. The rand, which dropped 7.2 percent versus the U.S. currency last week, will probably trade in a range between 7.70 to 7.76 today, de Vleeschauwer said.

Gold climbed as much as 1 percent to $865.04 an ounce in London, while platinum rose 1.3 percent to $1,577 an ounce. South Africa produces almost 80 percent of the world's platinum and about 10 percent of its gold, meaning the rand often moves in tandem with the metals' prices.

Government bonds rose, with the yield on South Africa's benchmark 13.5 percent security due September 2015 dropping 13 basis points to 9.38 percent. Yields move inversely to bond prices.

To contact the reporters on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net