The weak rand has spurred a buying spree and rerating of South Africa-based gold mining stocks, which have doubled in value this year, Reuters reports.
However, the volatile currency could reduce advances back down to size.
Since October, the rand has dropped 15% against the dollar. The currency's decline has coincided with a jump in spot gold, Reuters noted.
Harmony Gold, a Johannesburg-based gold mining and exploration company, gets 90% of its production from South Africa. In the December quarter last year, the miner posted a profit of 74 million rand, or $4.8 million, after losing 523 million rand in the previous three month period.
Its stock price has surged 230% in the year to date, Reuters added.
"There has been a rerating of gold stocks but the South African gold stocks certainly stand out. We can put this down to the impact of the weaker rand," Hanre Rossouw, portfolio manager for the Investec Global Gold Fund, told Reuters.
"And we have seen in the quarterly numbers coming out very strong cash-flow generation from these companies," he noted.
For April delivery, gold is retreating 0.7% to $1,261.80 per ounce on the COMEX this afternoon.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.
This is driven by multiple weaknesses, which should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks covered.
The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and poor profit margins.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: HMYHMY data by YCharts