May 29 (Bloomberg) -- South Africa's rand gained for a third week against the dollar, buoyed by higher metals prices and expectations that the pace of growth in Africa's largest economy will quicken.

The price of gold, the country's biggest export, rose 2.3 during the week and traded at $393.35 an ounce late Friday. Platinum gained 1.6 percent to trade at $830.50 an ounce.

``The factor of the week that boosted the rand was higher commodity prices,'' said Even Walker, who oversees bonds and cash among $18 billion in assets at Cape Town-based BoE Private Clients, South Africa's largest manager of private money. ``The commodity currencies are all stronger.''

The rand traded at 6.509 per dollar late Friday, from 6.737 the week before. It has risen 2.7 percent against the dollar this year. The South African currency probably will trade at between 6.40 and 6.70 per dollar next week, Walker said.

South Africa is the world's biggest producer of gold and platinum, which contribute about a fifth to its export earnings.

The rand was also boosted by South African Reserve Bank Governor Tito Mboweni's comments that he expects gross domestic product growth to accelerate to 4 percent next year.

Growth quickened to 3.1 percent in the first quarter, as five interest-rate cuts since June boosted consumer spending and helped manufacturing output expand 2.7 percent after shrinking 3.3 percent the previous quarter.

``If there is growth coming through, it will definitely be positive for the currency going forward and restore investor confidence in the economy,'' said Natheem Alexander, who oversees bonds and cash among $6.2 billion of investments at Cape Town's Abvest Associates Ltd. The rand probably will trade between 6.40 and 6.70 per dollar next week, Alexander said.

U.S. Report

The rand also rose after a report this week that U.S. jobless claims were higher than forecast, easing expectations for Federal Reserve interest rate increases. The rate for overnight loans between banks used by the Fed as its benchmark is at a 45-year low of 1 percent.

``There's no longer a fear in the U.S. market that the Fed is going to push rates up rapidly,'' said Andre Roux, who oversees bonds and cash among $32.4 billion in assets at Sanlam Investment Management in Cape Town.

To contact the reporter on this story: Mike Cohen in Cape Town, South Africa at mcohen21@bloomberg.net.

Last Updated: May 29, 2004 04:40 EDT