Nov. 10 (Bloomberg) -- The rand snapped a five-day rally against the dollar as the price of gold retreated from yesterday’s all-time high and platinum prices fell, dimming the earnings outlook for South Africa’s biggest exports.

The rand fell as much as 0.7 percent to 7.4614 per dollar and traded 0.5 percent weaker at 7.4417 by 4:24 p.m. in Johannesburg, from 7.4077 yesterday.

Gold, which rivals platinum as South Africa’s biggest export, declined for the first time in three days as the dollar rebounded and some investors sold the metal to lock in gains. The spot price of gold retreated from a record of $1,111.20 an ounce yesterday, as the dollar strengthened against a basket of six major currencies.

“The bigger picture for the rand at the moment is the value of the dollar and its impact on risk appetite and commodity prices,” said Imran Ahmad, an emerging-market currency strategist in London at Royal Bank of Scotland Group Plc. “Gold is coming off a bit and obviously it’s one of the most important commodities for South Africa.”

The rand rallied to a two-week high yesterday after the price of gold surged on speculation near-zero interest rates in the U.S. encourage investors to borrow in dollars to buy other assets, driving the U.S. currency weaker. Gold and platinum account for about 22 percent of South Africa’s export revenue, according to the nation’s Chamber of Mines, typically causing the rand to trade in tandem with the price of the metals.

Platinum fell 0.8 percent to $1,352.50 an ounce, erasing most of yesterday’s 1.3 percent advance.

Contraction Slows

The rand stayed weaker even after a government report showed manufacturing contracted at a slower pace last month, indicating the economy may be recovering from recession. Output dropped an annual 11.4 percent after declining a revised 15.2 percent in August, Pretoria-based Statistics South Africa said on its Web site.

South Africa is paying “a huge price” for the rand’s 26 percent rally this year as it prices the country’s goods “out of international markets,” Economic Development Minister Ebrahim Patel told reporters in Cape Town today. Patel said he plans to talk with business and labor unions within two weeks about ways of achieving a more competitive exchange rate.

“The authorities in South Africa are still quite worried that the strength of the rand this year is hurting exporters and manufacturers,” said Ahmad.

Government bonds fell in South Africa, pushing up the yield on the benchmark 13.5 percent security due September 2015 by four basis points to 8.30 percent. The bond’s price, which moves inversely to the yield, fell 21 cents to 123.66 rand.

To contact the reporter on this story: Garth Theunissen in Johannesburg gtheunissen@bloomberg.net

Last Updated: November 10, 2009 09:54 EST