PrimeXBT Insights: Will SA40 extend record highs? It could depend on the metals markets
The SA40 rose sharply at the start of 2025, rallying to a record high.
The main South African index is on track for its fifth straight month of gains, up over 10% since the start of the year, significantly outperforming the S&P 500. But can these gains continue?
This article takes a closer look at what’s driving the SA40’s performance — from gold and industrial metals to macroeconomic shifts — and how traders can access this index and other global markets with PrimeXBT, a regulated multi-asset broker now offering SA40 trading through both MT5 and its native platform.
What’s behind the SA40 rally?
Miners have played a central role in propelling the SA40 index to record highs.
The index for mining companies surged over 50% from January to April, thanks in part to the record run in Gold prices to their all-time high of $3500 in late April.
However, the mining index fell in May, raising questions over the sector’s ability to drive fresh all-time highs in the SA40.
Miners are the dominant driving force within the SA40 index, meaning that the metal prices the miners track could be key to understanding whether the run-up in the SA40 can continue.
Gold & Gold miners outlook
Gold prices rose 25% from the start of 2025 to a record peak of $3500 in late April before falling to current levels of $3230.
The precious metal reached multiple record highs, boosted by central bank buying and safe-haven appeal, owing to the escalating trade war at the time.
However, the US and China announced a truce in the trade war, lowering tariffs back to pre-Liberation Day levels, lifting the market mood while pulling safe-haven gold lower.
The trade outlook appears to be improving, which could limit the upside in Gold, at least in the near term.
However, other factors could support Gold prices higher in the long term.
Central bank buying is expected to continue, underpinning demand for the precious metal.
Furthermore, concerns over the mounting US debt pile could also help drive safe-haven demand.
Given the outlook for Gold, Gold miners could continue to lift the SA40 over a longer-term horizon.
Industrial metals & miners outlook
In addition to precious metal miners, miners such as Anglo American, BHP, and Glencore are also listed on the SA40 and make up part of the mining index.
These miners often track the performance of base metals such as copper and aluminum, which are closely tied to the outlook of the Chinese economy, given that China is the largest producer and consumer of these metals.
The thawing trade tensions between the US and China and broad-based stimulus efforts announced in China have supported base metal prices.
However, any upside in Copper and Aluminium is being capped by risks surrounding the Chinese economic outlook, Federal Reserve rate cuts, and the potential for sector-specific tariffs.
The Chinese economic outlook is weakening.
Recent data showed that retail sales and industrial production grew at a slower pace in April as tariffs came into effect.
China’s Q1 GDP was strong, but this was owing to front-loading of exports ahead of tariffs, a factor that won’t continue into Q2.
Another risk is the pace of Federal Reserve rate cuts.
So far, the impact of US tariffs isn’t showing up in hard data.
Federal Reserve Chair Powell and other Fed speakers have reiterated that the Fed is willing to be patient and stick to its wait-and-see mode to assess the impact of tariffs on the economy before cutting rates.
Finally, sector-specific tariffs could still be announced.
In February, Trump initiated steps that could lead to the imposition of tariffs on copper imports, which could keep prices capped until further clarity is obtained.
The de-escalation on the US-China trade war is good news for base metals such as Copper and Aluminium, removing the worst-case scenario.
However, uncertainty and risks remain, particularly regarding the economic outlook for China.
This means base metals prices could remain capped over the coming months and base metal miners may not contribute to further upside in the SA40.
Conclusion
The SA40’s strong start to 2025 has been driven largely by an impressive rally in mining stocks, especially gold miners.
While the recent trade truce has dampened the near-term outlook for Gold, its long-term outlook remains constructive due to persistent central bank demand and rising concerns over U.S. debt levels.
This suggests that gold miners could continue to support the SA40 higher over time.
However, the outlook for industrial metals is more mixed.
While the easing of U.S.-China trade tensions and Chinese stimulus measures are positives, lingering economic uncertainties and potential sector-specific tariffs could cap a recovery.
As a result, base metal miners may offer limited support to the index in the near term.
Trading SA40 with PrimeXBT
Gold and industrial metals play a strong role in driving the SA40.
The de-escalation of the US-China trade war and macroeconomic developments in the US and China create trading opportunities on the SA40 both near and long term.
PrimeXBT, a reputable regulated multi-asset broker, has recently broadened its offering to include additional indices like the SA40, alongside markets such as the S&P500, Gold, Aluminium, and Copper.
Clients can access Forex, CFDs on stocks, commodities, indices, crypto, and crypto futures through the industry-standard MT5 platform and PrimeXBT’s native trading platform.
Both platforms offer advanced tools for charting and risk management — including stop losses and limit orders — along with some of the most competitive trading conditions available.
Clients can take long or short positions to respond to price movements in either direction, with support for convenient local payment methods.
With PrimeXBT’s broader market offering, traders can effectively navigate market volatility and develop targeted strategies within a safe, all-inclusive trading environment.
It is important, however, to remember that trading involves risk, and a well-defined risk management strategy is essential.
Start trading with PrimeXBT South Africa
Disclaimer
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Past performance is not a reliable indicator of future results.
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