Gold as the ultimate hedge: Zim’s gold ownership policy

GOLD has long been trusted as a safe store of value, prized across civilisations for its ability to preserve wealth in times of uncertainty.

In modern economies, gold remains a reliable hedge against inflation, currency depreciation and financial instability.

These qualities become important when confidence in paper money weakens.

For Zimbabwe, this role of gold carries particular weight.

The country’s economic history, shaped by episodes of high inflation and currency volatility, has made citizens acutely aware of the risks of holding savings in conventional financial instruments.

As a result, gold has emerged not merely as a commodity, but as a symbol of financial security and resilience for households and businesses alike.

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Zimbabwe is one of Africa’s major gold producers, with the mineral anchoring export earnings and underpinning key monetary policy initiatives.

Yet this abundance raises an important policy question: should citizens be free to own and hold gold as a legitimate store of value or should tighter controls prioritise State reserves and foreign currency inflows?

This article examines gold’s role as the ultimate hedge in Zimbabwe and interrogates government policy on gold ownership.

It considers whether current regulations strike the right balance between safeguarding national interests and allowing citizens to protect their wealth in an economy where stability remains fragile.

What is a store of value?

A store of value is an asset that preserves its purchasing power over time, allowing wealth to be saved and used in the future without being eroded by inflation or economic shocks.

Unlike income-generating assets, it is valued primarily for its ability to hold worth rather than produce returns.

Its importance becomes clear during periods of inflation, currency depreciation or economic instability.

An effective store of value must be durable, divisible, recognisable, stable and scarce.

Gold meets these criteria better than most assets: it resists decay, can be subdivided into bars or coins, is widely accepted and remains finite and costly to produce.

Historically, gold formed the backbone of monetary systems under gold standards, linking currencies directly to reserves.

Today, even without formal backing, gold remains a reliable hedge against inflation, a safe haven in crises and an alternative store of wealth — especially in economies like Zimbabwe’s, where currency volatility makes trusted stores of value essential.

Value of gold

Gold’s value goes beyond its daily market price.

It rests on trust built over centuries and reinforced in times of economic stress.

Unlike paper currencies, whose worth depends on policy credibility and monetary discipline, gold draws its value from scarcity, durability and universal acceptance.

This makes it a reliable hedge against inflation and currency depreciation.

In Zimbabwe, gold’s importance is magnified by economic reality.

The country has endured repeated episodes of inflation and currency instability, eroding confidence in conventional savings.

For many households and businesses, gold has become a practical means of preserving wealth when bank deposits and cash balances lose value.

This explains the enduring appeal of gold coins, jewellery and physical bullion as informal savings instruments.

Gold is also central to the national economy. It is Zimbabwe’s largest mineral export, contributing the bulk of mineral-based foreign currency earnings and playing a key role in strengthening the balance of payments.

Gold deliveries underpin central bank reserves and have informed recent monetary policy initiatives, including gold-backed instruments designed to restore confidence in the domestic currency.

However, the very value of gold raises difficult policy questions.

Government regulation of gold ownership and trade is driven by the need to curb smuggling, secure export revenues and protect national reserves.

Yet restrictive ownership rules and complex licensing requirements risk pushing gold into informal markets, limiting transparency and denying citizens a legitimate hedge against inflation.

A balanced gold ownership policy, one that formalises citizen participation while safeguarding State interests, could unlock broader benefits.

Allowing regulated private ownership of gold, alongside efficient buying, refining and trading systems, strengthen financial inclusion, mobilise domestic savings and reduce illicit trade.

In an economy still searching for stability, gold’s value lies not only in State vaults, but also in its potential to protect household wealth within a clear and credible regulatory framework.

Legal framework governing gold in Zimbabwe

Zimbabwe’s gold sector has long been governed by strict laws designed to protect a strategic national resource and secure foreign currency earnings.

At the centre of this framework are the Gold Trade Act [Chapter 21:03] and the Reserve Bank of Zimbabwe (RBZ) Act, which together define who may possess gold and how it may be traded.

Under the Gold Trade Act, the possession and dealing in gold by ordinary citizens has historically been highly restricted.

The law prohibits anyone from buying, selling or holding gold without a licence or permit, effectively limiting lawful gold handling to licensed miners, dealers and authorised buyers.

Raw gold cannot be freely owned or traded by individuals, even in small quantities, without State approval.

While these controls were intended to curb illegal mining and smuggling and to ensure gold passed through formal channels, they also denied citizens access to gold as a legitimate store of value.

The RBZ Act reinforces State control by granting the central bank exclusive authority to issue coins, including gold coins.

This legal mandate underpins government-backed gold instruments designed to absorb excess liquidity, stabilise the financial system, and offer a regulated alternative to holding physical gold.

Together, these laws highlight a persistent policy dilemma: safeguarding national interests while limiting citizens’ ability to use gold to protect their wealth.

As economic uncertainty persists, the challenge for policymakers is to strike a better balance, one that maintains oversight of the gold sector while allowing broader, regulated participation in gold ownership within the formal economy.

Introduction of the Mosi-Oa-Tunya Gold Coin

In July 2022, RBZ introduced the Mosi-Oa-Tunya Gold Coin to give citizens a legal store of value and investment option amid high inflation and economic instability.

Each coin weighs one troy ounce with 22-carat purity, is serialised for traceability and comes with a Bearer Ownership Certificate.

Buyers can hold the coin physically or deposit it with a bank.

Coins are liquid, tradable locally and internationally, and can even serve as collateral for credit.

Citizens can purchase coins in local currency, while non-residents pay in foreign currency.

After a 180-day vesting period, holders can redeem coins for cash at prevailing international prices and exports are allowed with proper documentation.

The gold coin is designed not as a collectible, but as a serious financial instrument.

It provides a tangible hedge against currency depreciation, encourages savings and offers an alternative to holding volatile local cash or relying solely on foreign currencies like the US dollar.

The RBZ initiative mirrors global practice, giving Zimbabweans a secure way to preserve wealth in uncertain times.

Suspension of gold coin sales and current situation

By mid-2025, RBZ announced that it had suspended the sale of gold coins following a mop-up exercise aimed at clearing remaining stock.

Sales of newly-minted coins were halted in April 2024 and the mid-2025 exercise involved only residual or redeemed coins.

Although no new coins were minted for sale, existing coins remain tradable and redeemable by holders.

Analysts noted that the suspension affects the overall landscape of gold as an investment tool if alternative instruments are not introduced, but the central bank affirmed its commitment to monetary stability measures and innovative instruments.

Debate over gold ownership and policy reform

The introduction of gold coins in Zimbabwe reignited debate over who should own gold and under what conditions.

While seen as a hedge against inflation and a confidence-building measure, the move also highlighted tensions within existing laws.

Critics point to the Gold Trade Act, which restricts gold possession and trade to licensed miners and dealers.

They warn that allowing citizens to hold coins could create loopholes for illicit trade or elite capture and concentrate ownership among the wealthy.

RBZ, however, defends the coins as regulated instruments with strict KYC [know your customer], traceability and controlled distribution, ensuring lawful and transparent ownership.

Looking ahead, the Finance ministry has proposed broader liberalisation, allowing citizens to buy and hold certified gold assets beyond central bank coins, mirroring models in India and China.

Proponents argue this formalises savings, reduce illicit trade and enhance financial inclusion

Such reform requires updating the Gold Trade Act and related regulations to create a transparent, accessible retail gold market.

As the debate continues, Zimbabwe faces a key policy challenge: balancing State control with citizens’ right to protect wealth in an uncertain economy.

Gold in the broader monetary strategy

Gold has become a central pillar in Zimbabwe’s evolving monetary strategy as authorities search for credible ways to restore confidence in money and protect savings from inflation.

Faced with persistent currency instability and limited trust in traditional monetary instruments, policymakers have increasingly turned to gold as a stabilising anchor, both symbolically and practically.

One of the most prominent initiatives has been the introduction of the Zimbabwe Gold (ZiG) currency in 2024. ZiG was conceived as a gold-backed digital and electronic currency, intended to draw strength from the country’s gold reserves and break the cycle of rapid currency depreciation.

By linking the value of local money to a tangible asset, authorities hoped to rebuild confidence and encourage wider use of the domestic currency.

However, despite this backing, ZiG has experienced volatility, reflecting broader macroeconomic pressures and lingering scepticism among the public.

Alongside ZiG, the Reserve Bank introduced gold coins as an alternative store of value.

Unlike digital balances or bank deposits, gold coins offered a physical and tangible asset that citizens could hold directly.

For investors and savers wary of currency risk, the coins provided a sense of security rooted in the enduring value of gold.

Their popularity underscored a clear public preference for asset-backed instruments over purely fiat alternatives.

More recently, proposals to liberalise gold ownership point to the next phase of this strategy.

By allowing citizens greater freedom to buy and hold certified gold assets, beyond central bank-issued coins, authorities aim to broaden investment choices while keeping savings within the formal economy.

Such reforms reduce reliance on rigid controls and create regulated pathways for citizens to hedge against inflation without resorting to informal or illicit markets.

Taken together, ZiG, gold coins and prospective gold ownership reforms illustrate a gradual shift in monetary thinking.

Rather than relying solely on policy pronouncements, Zimbabwe’s authorities are increasingly embedding gold into the financial system as a foundation for trust.

Whether this approach succeeds will depend not only on gold backing, but on consistent policy, transparency and a regulatory framework that aligns State objectives with citizens’ need for reliable stores of value.

Physical gold vs digital currency

In Zimbabwe, gold has always been more than a precious metal, it is a lifeline.

With inflation, currency volatility and banking instability, citizens rely on gold to protect their wealth.

But the rise of central bank digital currencies (CBDCs), like the electronic Zimbabwe dollar or other digital forms of money, has sparked debate: can digital currency match gold as a store of value?

Physical gold offers tangible security.

Coins, bars or jewellery can be held directly, independent of banks or electricity.

It is globally recognised, scarce and durable — qualities that make it a trusted hedge, especially when the local currency is unstable.

For many Zimbabweans, particularly in rural areas, physical gold provides visible, reliable savings.

Challenges remain, however: safe storage, liquidity and the risk of theft or informal trading.

CBDCs, in contrast, offer convenience and integration into the formal financial system.

They allow instant payments, digital record-keeping and easier transactions without handling cash.

They can help citizens to participate in modern banking and expand financial inclusion.

But digital currency is only as secure as the technology and institutions behind it.

In Zimbabwe, where trust in banks and the local currency has wavered, CBDCs may not provide the same confidence as holding physical assets.

The choice is not simply one or the other.

Physical gold provides resilience, a hedge against inflation and a safety net outside the banking system.

CBDCs offer convenience and access to formal financial tools.

Zimbabwe’s challenge is to create a framework where citizens can safely use both, holding gold for security while engaging digitally for day-to-day transactions.

In a country where cash can lose value overnight, gold remains the ultimate hedge, while digital currency serves as a tool for convenience, not a replacement.

Balancing the two may be the key to preserving wealth and confidence in the financial system.

Future directions and challenges

For gold to play a meaningful role in Zimbabwe’s monetary and financial system, policy implementation remains critical.

This includes reforming the Gold Trade Act to formalise citizen ownership beyond central bank coins, building transparent retail gold markets and ensuring strong investor protections through KYC, anti-money-laundering measures and credible pricing mechanisms.

Policymakers must also balance gold ownership with other hard assets such as the US dollar, property and equities.

Gold alone cannot stabilise the economy.

But when integrated into a broader framework of sound fiscal and monetary policy, it can help to preserve wealth, rebuild confidence, and support long-term financial stability.

Gold’s enduring appeal as a store of value stems from its physical properties, finite supply, and global acceptance.

In Zimbabwe, where currency instability and inflation have punctuated recent decades, gold has taken on renewed significance as both a hedge and an investment.

The introduction of the Mosi-Oa-Tunya gold coin represented a watershed policy moment, enabling citizens to legally own gold as a financial asset under controlled conditions.

While the suspension of new coin sales has introduced some uncertainty, the public tradeability and value retention of existing coins persist.

Emerging policy discussions to liberalise gold ownership more broadly signal a potential evolution towards greater financial autonomy for citizens and alignment with international practices.

However, such reform must be accompanied by robust regulatory frameworks to ensure equitable access, market integrity and alignment with broader economic goals.

In summary, gold remains a vital store of value for Zimbabweans and government policy is gradually adapting to recognise and harness this reality, striking a balance between regulation, economic stability and individual financial empowerment.