By Polya Lesova
FRANKFURT (MarketWatch) -- The rand rose 1.9% against the U.S. dollar on Monday, boosted by the rally in gold prices and expectations that data due Tuesday will show the South African economy grew by an annualized 0.5% in the third quarter from the preceding quarter. "Many are linking the rally in gold to new record highs with the rand's strength," said Marc Chandler, currency strategist at Brown Brothers Harriman & Co., in a note to clients. In the last three months, the rand has shown a 60% correlation with gold, he said. South Africa, the biggest economy on the African continent, is a major exporter of gold, platinum, diamonds and other metals. Economic growth is expected to be boosted by public spending, particularly on infrastructure in preparation for the World Cup next year, which South Africa will host. "The rand is also being boosted by the general risk/liquidity environment and relatively attractive interest rates," Chandler said. The rand has gained 27% against the dollar so far this year.
