• Gold has shattered previous highs, climbing above $5,500 per ounce amid a plunging US dollar at four-year lows, Fed rate hold with easing hints, escalating geopolitical tensions including US-Iran risks
• Zimbabwe capitalised on the bull market with record 2025 gold output of 46.7 tonnes generating export earnings of $4.6 billion
• Large-scale miners (LSMs) face tempered benefits from the price surge due to Zimbabwe's tiered royalty jumping to 10% above $5,000/oz (deducting $550–$560 per ounce now), compounded by corporate tax, CSR obligations, and beneficiation mandates potentially limiting retained revenue to below 70%

Harare-Gold prices have seen an escalation of its already historic bull run, surging past the $5,500 per ounce level on January 29, 2026, and reaching $5,550 in spot trading. This marks a fresh all-time high, with the metal up roughly 1.7% to 2.4% in the session alone, building on massive year-to-date gains exceeding 97% in some benchmarks.

Gold prices are poised for continued strength through the end of 2026, with major analysts forecasting further gains driven by persistent safe-haven demand, ongoing central bank purchases (projected around 500-900 tonnes annually), sticky private-sector hedging against macro-policy risks like fiscal sustainability and currency debasement, and potential Federal Reserve easing that lowers the opportunity cost of holding the metal.

Consensus targets cluster around $5,000–$6,000 per ounce by year-end, including Goldman Sachs' revised December 2026 forecast of $5,400 (up from $4,900 previously), J.P. Morgan's expectation of prices pushing toward $5,000 in Q4 2026 with averages around $5,055, Deutsche Bank's more aggressive $6,000 call citing increased allocations to non-dollar assets, and others like Societe Generale echoing $6,000 as achievable or even conservative amid structural diversification trends.

While some scenarios from the World Gold Council suggest moderate 5–15% upside from current levels in a softening growth environment or sharper 15–30% surges if risks escalate, a deeper correction of 5–20% remains possible only if global conditions stabilize unexpectedly and hedges unwind, and overall, the prevailing view sees the bull trend intact with limited downside risks, positioning gold for new highs by December 2026 as long as geopolitical uncertainties, dollar weakness, and institutional buying endure.

The rally reflects intense safe-haven demand as investors flock to gold amid a sharply depreciating US dollar hitting four-year lows, ongoing tolerance from President Trump for currency weakness to aid exports during tariff tensions, and persistent geopolitical risks including US naval readiness in the Middle East for potential swift action against Iran.

The Federal Reserve's recent decision to hold interest rates steady at 3.50%–3.75% while highlighting resilient economic activity, early labour-market stabilisation, elevated inflation, and an uncertain outlook has kept easing expectations alive, with some officials advocating for quicker cuts later in the year.

This environment reduces the opportunity cost of holding non-yielding assets like gold, while robust central bank purchases often exceeding 1,000 tonnes annually and strong ETF inflows add structural support.

Fiscal concerns over soaring sovereign debts and recession signals in major economies further bolster the momentum, with analysts projecting potential moves toward $6,000 if these pressures endure, though overbought conditions could invite short-term pullbacks.

In jewellery-heavy markets like India and China, demand holds firm despite the elevated prices, supporting physical offtake during seasonal periods. For gold-producing nations, the boom delivers substantial revenue potential, but outcomes vary based on cost structures and fiscal policies.

Zimbabwe, as one of Africa's key producers, has ridden this wave to impressive results, with 2025 output hitting a record 46.7 tonnes up 17% from 36.48 tonnes in 2024 surpassing government targets and driven largely by artisanal and small-scale miners contributing around 34.9 tonnes, while large-scale operations supplied about 11.8 tonnes.

This performance shows the sector's rebound, fuelled by high global prices and supportive policies, with export earnings likely approaching or exceeding $2.6 billion equivalent for the year.

Large-scale miners (LSMs) in Zimbabwe face a more nuanced picture amid the surge above $5,500. The country's revised royalty framework, enacted for 2026 after industry feedback, maintains a 5% rate on gold priced between $1,200 and $5,000 per ounce, but shifts to 10% only when prices exceed $5,000, meaning the higher tier now applies fully at current levels, deducting roughly $550–$560 per ounce upfront.

While this captures more state revenue during peaks, it layers onto an already demanding cost structure for formal operators, who unlike many small-scale or artisanal producers bear the full weight of multiple obligations.

These include corporate income tax at 24.72% on profits, the AIDS levy at 3% on corporate tax payable, NSSA payroll contributions totalling around 9% split between employer and employee, substantial employee wages and benefits amid skills shortages and rising costs, mandatory CSR investments often ranging from 1% to 5% of revenues to sustain community relations and licenses, and downstream beneficiation requirements that demand capital for local processing and value addition.

Collectively, these can reduce retained revenue to 60–70% of gross for LSMs at high price levels, compared to lighter burdens in jurisdictions like Ghana or Canada, potentially constraining reinvestment, expansions, or new project attractiveness in a challenging operating environment marked by power instability and currency fluctuations.

The government stands to gain significantly from elevated royalties during this phase, channelling funds toward fiscal needs, yet prolonged high effective taxation risks slowing formal sector growth and shifting more reliance to less-regulated artisanal mining.

Industry calls persist for further refinements, such as profit-linked adjustments or targeted incentives for beneficiation and sustainable practices, to better align state revenue goals with producer incentives and long-term development.

Zimbabwe's gold sector holds strong fundamentals, record recent output, potential for large projects like Bilboes to scale, and growing appeal for ethical, traceable sources in global demand with high prices offering a clear tailwind if fiscal drag is managed thoughtfully.

As the rally unfolds in this volatile landscape, gold's role as a hedge against uncertainty shows remarkable endurance.

For Zimbabwe, converting these sky-high levels into sustained prosperity will depend on striking the right balance between capturing windfalls and fostering an environment where large-scale miners can thrive alongside the vital small-scale segment, ensuring the boom translates into broader economic gains rather than short-term gains offset by structural hurdles.