South African mining giant sends a warning to investors

Despite an ongoing rally and consecutive record highs, South African mining giant Sibanye-Stillwater expects the gold price to average $2,506 per ounce in 2026.

With the gold price currently at a record high of over $5,000 per ounce, Sibanye’s forecast would mean a halving of the precious metal’s price over the next year.

Initially founded as a gold miner, Sibanye has since diversified into various other resources, particularly platinum group metals, and, more recently, battery metals like lithium.

The mining giant has benefited immensely from soaring commodity prices over the past year, especially its gold operations.

Based on the miner’s projections for the gold price, shared in a recent strategy update, this may come to an end soon.

Sibanye’s pessimistic predictions come as the gold price rally started to gain serious momentum in 2025 and continued into 2026, hitting record high after record high.

On Wednesday, 29 January, the precious metal hit another new record of $5 500/oz, just to surpass it the next day and hit $5,600.

The Bureau for Economic Research’s Lisette IJssel de Schepper explained that precious metal prices have been benefiting from what is known as “debasement trade”.

Debasement trade has become an ongoing investment strategy amid heightened uncertainty and the weakening of the United States dollar.

Normally, heightened uncertainty would see investors flock to assets traditionally considered safe havens, like gold and US dollar-denominated assets.

However, over the past year, investors have favoured the former while selling out of US dollars and other American assets.

This is because the United States, and specifically US President Donald Trump, has been the main catalyst of uncertainty over the past year.

Wild swings in trade policy and concerning diplomatic moves from the United States have skyrocketed uncertainty in financial markets, sending investors flocking to precious metals like gold and silver while dumping US dollar-denominated assets.

This saw the US dollar experience one of its worst years on record in 2025 while gold prices reached record highs.

Golden run

This trend of a weakening dollar continued into the new year, with the greenback continuing to suffer, down almost 2% in 2026 to date.

IJssel de Schepper explained that the dollar recently recorded its biggest one-day slump since the Liberation Day sell-off seen in April 2025.

She said this was boosted by US President Donald Trump’s apparent indifference to the greenback’s weakness.

“In fact, Trump claimed the dollar was ‘doing great’,” she said, adding that investors’ waning appetite for US Treasuries and the dollar has now been dubbed the ‘debasement trade’. 

She explained that this is not only positive for South Africa, with the rand now trading at four-year lows against the US dollar, but has also benefited precious metals prices.

IJssel de Schepper said precious metal prices also benefit from the debasement trade, with gold hitting record high after record high. 

“The price gained an incredible $250/oz on Wednesday (28 January) alone to surge past $5,500/oz and then merrily continued to $5 600/oz the next day,” she said. 

The silver price has also been a beneficiary of debasement trade, surpassing $120/oz for the first time ever.

Despite these record rallies in precious metals, the first signs of a reversal may be emerging.

On Thursday, 29 January, prices of metals declined sharply, with gold in particular taking a beating, recording a 5% daily decline. 

Ijssel de Schepper believes this could have been driven by a somewhat stronger dollar amid rumours of Trump’s nomination for Federal Reserve chair, whom many believe will slash US interest rates.

If Sibanye’s projections are accurate, this may be the start of a notable decline in the gold price, with the miner placing the precious metal at $2,506/oz for 2026.

While Sibanye expects the gold price to roughly halve from current levels in 2026, it projects a slight uptick to $3,068/oz in 2027.

However, the miner does not expect this to last, projecting the gold price will keep falling over the next few years, from $2,931/oz in 2028, to $2,730/oz in 2029, down to $2,463 in 2030.