Investors will scrutinise results this week from South African gold producers such as the world's number two gold miner AngloGold Ashanti to gauge how far the strong rand has eaten into earnings, traders said on Friday.
"The results are going to be awful because of the rand," said a senior trader in Johannesburg.
Analysts believe that more than half of South African gold mines are making losses as the rampant rand reduces export earnings.
The rand hit its highest level against the dollar in 5-1/2 years on Monday, weighing on resource stocks such as gold producers who are paid for the metal in dollars.
The rand price of gold per ounce fell 9.3 percent in the second quarter as the price of bullion weakened from around $426/oz at the start of April to $394/oz at the end of June.
Gold Fields kicks off the gold quarterly reporting season on July 29 and is seen posting a 47 percent drop in earnings per share, excluding contributions from financial instruments and debt.
An average estimate of seven analysts polled by Reuters came in at 25.6 cents, down from 48 cents in the March quarter, with forecasts ranging from 12 cents to 33 cents.
Traders said investors were wary of gold share valuations with many believing that gold stocks were now too expensive.
"People will look at the valuations because gold shares, even down at these levels, are not cheap," the trader said.
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