Markets wrap: Rand holds near multi-month high on gold rally as Nvidia rebounds

The rand was trading around R16.00 to the dollar on Thursday, close to its strongest level since late February, supported by a subdued US dollar and elevated gold prices. South Africa's inflation eased to 4.3% in July from 5% in June, below forecasts, helped by lower fuel costs following a temporary US-Iran truce.

However, core inflation rose for a fifth consecutive month to 4.2% – its highest level since July 2024 – leaving the disinflation picture mixed ahead of the South African Reserve Bank's next policy decision on 23 September. It is expected that the central bank may hold steady or opt for a further increase depending on how price pressures evolve.

Gold eases from three-month high

Gold was trading around $4,630 an ounce on Thursday morning, down slightly from the $4,647 level reached overnight, pulling back modestly after a strong multi-day rally that had pushed prices to a three-month high. The retreat reflects easing oil prices and signs of progress toward safer shipping routes through the Strait of Hormuz, reducing some immediate geopolitical demand for the metal.

Wall Street's choppy build-up

US markets had a volatile few sessions ahead of chip maker Nvidia's earnings. On Tuesday, the S&P 500 gained 0.32% to close at 7,677.28, the Nasdaq Composite jumped 0.66% to 26,151.30, and the Dow Jones Industrial Average rose 0.3% to 53,577.40 – its third straight winning session – as Treasury yields eased and chip stocks rallied.

Oil prices fell sharply that day, with Brent crude dropping 3.9% to $88.58 a barrel, as the US shifted toward economic pressure rather than military escalation against Iran.

Wednesday's session was more subdued as markets digested in-line core PCE inflation data – the Federal Reserve's preferred inflation gauge, which rose 0.2% month-on-month and 3.3% year-on-year for July. The S&P 500 closed roughly flat at 7,675.70, the Nasdaq Composite dipped 0.08% to 26,130.20, and the Dow slipped 0.21% to 53,463.88, weighed down by a pullback in Nvidia shares ahead of its results and an 11% slump in Intuit after disappointing fiscal 2027 guidance.

Chipmaker beats and guides higher

Nvidia reported second-quarter fiscal 2027 earnings per share of $2.22, comfortably beating analyst expectations of $2.09, and guided to third-quarter revenue of $108 billion – around $3.8 billion above Wall Street's $104.2 billion consensus. Chief financial officer Colette Kress signalled strong sales growth extending into fiscal 2028, easing fears that AI spending momentum was fading.

The chipmaker's shares surged roughly 6-7% in premarket trading on Thursday. Adding to the momentum, Nvidia confirmed plans to acquire open-source AI model repository Hugging Face for $12.9 billion, a move aimed at strengthening its position in AI software infrastructure. Chief executive Jensen Huang said his only regret was not investing more in AI research facilities sooner.

The results lifted futures broadly: contracts on the S&P 500 rose 0.4% and Nasdaq 100 futures gained around 1% in early Thursday trading, with Asian equity futures mixed – pointing to gains in South Korea but declines in Japan and Australia.

Looking ahead

Attention now turns to Friday's Jackson Hole Economic Symposium, where commentary from the Federal Reserve chair will be closely watched for signals on the future path of US interest rates. With Nvidia's results reinforcing confidence in AI infrastructure spending, sentiment on the JSE is likely to stay supportive for resources and dual-listed technology counters in Thursday's session.

SOURCES: CNBC, Bloomberg, Reuters, Trading Economics, JM Bullion, Kitco, Kiplinger, 24/7 Wall St.