UPDATE 1-South African rand strengthens amid gold gains, dollar weakness

·2 min read

(Updates prices, adds stocks, recasts throughout)

JOHANNESBURG, May 24 (Reuters) - South Africa's rand strengthened on Tuesday, despite fears of a slowdown in a global economic recovery, amid U.S. dollar weakness and rising prices of gold, a significant export of the country.

At 1522 GMT, the rand traded at 15.7200 against the dollar, 0.3% stronger than its previous close. Early in the day, the rand had weakened as much as 0.5% against the dollar.

Multiple threats to the global economy topped the worries of the world's well-heeled at the annual Davos think-fest on Monday, with some flagging the risk of a worldwide recession. Meanwhile, U.S. stocks tumbled after social media firm Snap issued a weak earnings forecast.

The U.S. dollar index hit a nearly one-month low on Tuesday, after European Central Bank President Christine Lagarde said eurozone interest rates will likely be in positive territory by the end of the third quarter, giving the euro a boost.

Gold prices rose to their highest level in two weeks, benefiting from a fall in the dollar. While the rand often tracks global economic developments and is considered a riskier asset, it is also used by investors as a proxy for the yellow metal.

A South African business cycle indicator released on Tuesday morning increased 0.5% month-on-month in March, according to central bank statistics, down from 3% in February, in an otherwise light week for domestic data.

On the Johannesburg Stock Exchange (JSE), both the All-Share index and the blue-chip index of top-40 companies closed down about 1% each at 67,691 and 61,177 points, respectively, weighed down by tech companies.

Tech stocks including index heavyweight Naspers Ltd closed down over 6.7%, while its subsidiary Prosus NV ended down over 6%, mirroring the fall in Wall Street's main indexes, which saw several social media and internet stocks slump after Snap's weak earnings forecast.

The government's benchmark 2030 bond fell, with the yield rising 1.5 basis points to 9.735%.

(Reporting by Alexander Winning, Rachel Savage and Bhargav Acharya; Editing by Amy Caren Daniel)

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