The South African rand strengthened on Friday as gold prices edged higher and remained on course for a third weekly gain, while a weaker US dollar and the US Treasury's bond buyback initiative boosted sentiment toward risk-sensitive currencies and precious metals.

At 0734 GMT the rand traded at 16.0550 against the dollar, about 0.4% up from its previous close.

US Treasury Secretary Scott Bessent said he may further increase the government's repurchases of Treasuries. That came after the Treasury said it would double the size of buybacks on longer-dated securities over the next quarter.

The dollar headed for a weekly loss, making greenback-priced bullion more affordable for buyers overseas.

Gold, South Africa's key export, edged higher on Friday and was on track for a third consecutive weekly gain, supported by a weaker dollar and the US Treasury's bond-buyback move.

Like other risk-sensitive currencies, the rand often takes cues from global developments when there is little domestic economic data on the calendar.

"The rand is trading firmer at R16.06 on the back of the softer dollar, and generally firmer EM and commodity-driven currencies," said Andre Cilliers, currency strategist at TreasuryONE, referring to emerging markets.

On the Johannesburg Stock Exchange, the Top-40 index was last up 2% in early trade.

South Africa's benchmark 2035 government bond was also firmer in early deals, as the yield fell 2.5 basis points to 8.54%.